Commonwealth to pass on reduced interchange fees to merchants

Commonwealth to pass on reduced interchange fees to merchants

The Commonwealth Bank of Australia is promising to pass on the benefit of reduced interchange to its credit card merchant base.

Bruce Munro the Commonwealth Bank's executive general manager, working capital services says the lower interchange fees set by Visa, MasterCard and Bankcard will be passed on to the bank's 118,000 merchants in the form of lower credit Merchant Service Fees from 1 November.

The reduction in fees was mandated by the Reserve Bank of Australia following an investigation into profiteering, price-fixing and anti-competitive behaviour by banks and card schemes. Average interchange fees in Australia are expected to fall by about 40% from 0.95 per cent to 0.55–0.6 per cent as a result of the reforms.

Every Commonwealth merchant will benefit from the changes at different levels depending on their mix of transaction types and the reductions that apply to each category, says Munro.

"For new merchants, we are now quoting services at the lower pricing," he says. "This is great timing for clients taking up our new PayLite low cost terminal or the XPOS value added services that are part of our flagship Comm2000 terminal."

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