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The Australian Small Business and Family Enterprise Ombudsman Bruce Billson is repeating his call for financial institutions to adopt least-cost routing for small businesses, and applauding the decision of one major bank to do so.
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Bruce Billson welcomed the announcement that the Commonwealth Bank will adopt least-cost routing to slash the high and hidden costs associated with electronic card payments for small operators and family enterprises.
The Commonwealth Bank’s move will automatically lower costs incurred by small businesses and family enterprises with a turnover of less than $250,000.
It comes after repeated calls from Mr Billson for banks and financial institutions to adopt least-cost routing to ease the financial pressure on small businesses for which hidden fees can make a significant impact.
“I congratulate the Commonwealth Bank for hearing the feedback from the small business community and taking this first step,” Mr Billson said. “There is a lot more to be done though, and I urge all banks and financial institutions to address this critical issue.”
The Commonwealth Bank has also announced that it will waive three months of merchant fees for those small businesses hardest hit by COVID-19 lockdowns, news Mr Billson called a terrific early Christmas present.
“Many small businesses and family enterprises already operating on tight margins and battling the disruption to their businesses caused by COVID-19 can’t afford the added burden of paying higher than necessary fees for their financial transactions,” Mr Billson said.
He noted that the use of cashless transactions, particularly tap-and-go payments, had dramatically increased due to COVID-19.
“The cost of these higher and hidden charges across the economy is many millions of dollars – money that could be better put to work to grow business and employment prospects,” he said.