Australia's SMEs unfairly punished by major banks
Australia's small and medium businesses (SMEs) are being charged an estimated $400 million more in fees than they should every year according to Tyro Payments, Australia's leading EFTPOS provider.
Jost Stollman, Tyro CEO said that SMEs are having to compete with financial lead in their saddle bags, courtesy of our major banks.
"On average an SEM business processes about 250 Visa and MasterCard credit or debit card transactions monthly. The interchange fees on each transaction costs them about 53 cents, adding up to $1600 per year," he said.
"In comparison, the big retailer bringing in a much larger profit would only pay about 16 cents for the same transaction."
In its submission to the Financial System Inquiry, Tyro is calling for an ACCC inquiry into anti-competitive structure and behaviours in the Australian payment space dominated by the four major retail banks.
Tyro claims that the Inquiry is an opportunity to bring Australia up to a competitive international level when it came to innovation, productivity and healthy market competition.
"Australia has lagged behind other western countries when it comes to encouraging innovation and exploring new technologies," Mr Stollman said.
"The anti-competitive structure and behaviour of Australia's oligopolistic banking sector stifles innovation, reduces productivity, eliminates choice, taxes the SME business community and ultimately increases the cost for the consumer," he added.
Tyro Payments is not the only organisation calling on more competition in the banking industry. In its submission to the Inquiry, the Mortgage and Finance Association of Australia (MFAA) has called for the Federal Government to facilitate competition in the banking industry to lower interest rates and encourage loan product innovation. The four major banks now hold 79 per cent of the housing loan market, compared with 58 per cent just before the Global Financial Crisis.Both consumers and business owners are encouraged to use comparison sites like Mozo to compare rates and negotiate better deals with their banks or switch providers.