Consumers may still be hit by higher EFTPOS charges when interchange fees rise

Consumers have been warned that there is no guarantee they won’t be affected by higher EFTPOS fees, after the group that manages the electronic payment system yesterday clarified part of an earlier statement regarding changes to interchange fees.

The retraction highlights the controversy surrounding the decision, which will implement a tiered system of interchange fees rather than the flat rate that has previously been used.

Jost Stollman, chief executive of payments group Tyro, says it is impossible to say whether banks and businesses will increase fees instead of passing them on to consumers, and the statement has been changed to reflect that uncertainty.

“The response of EPAL is to insinuate that retailers and consumers may be affected by the change because it’s an interchange rate, that is the nature of it.”

“The fact of the matter is they have to draw back, and avoid the impression they might give that there could be no change, because there may very well be. We just don’t know at this point.”

Last month EPAL said in a statement that “Australian consumers should not face new charges following planned changes to EFTPOS interchange fees”, stating that the charges affected financial institutions and don’t directly affect consumers.

However, the new statement downplays that sentiment and says it cannot be certain whether consumers will be affected, explaining that interchange fees are paid between businesses and banks.

“The planned changes to EFTPOS interchange fees will commence to be implemented from October 1, 2011. It remains to be seen whether acquirers will pass part or all of any fee changes onto retailers and what retailers may do in relation to their consumer as a result of any changes.”

EPAL also stated that it has no role in relation to the negotiation of changes set between an acquirer and the retailers it works with.

“It is therefore premature to state with certainty what impact the planned changes will have on retailers or then upon their consumers.”

Stollman says the media coverage of the change in interchange fees has often seemed to accept the fact that rates will be raised, but this is not the case.

“I cannot say for certain what will happen with the fee increases, it’s not up to anyone to determine if that is going to happen yet.”

The changes come into effect next month. Stollman says it is right for EPAL to clarify its position.

“Many people have concluded that fees will be passed on. But EPAL is basically saying you can’t say that with certainty, which they cannot.”