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Eftpos, BPAY and NPP merger tries to quell retail industry fears

Eftpos, BPAY and the New Payments Platform are seeking to quell industry fears that their plan to unify under a single company – NewCo – will lessen payment competition and reduce the availability for least cost routing for businesses, according to the ACCC.

In a statement, the ACCC said the businesses have put forward a court-enforceable undertaking which will hold it to continue investing in and maintaining eftpos, accepting a QR-code based payment standard by the end of June 2022, and will “do everything in its control to make [least cost routing] available for three years”.

ACCC chair Rod Sims said eftpos plays an important role in maintaining competition in the payments sector, and these measures are intended to ensure it continues to be.

Industry Committee Chair Robert Milliner said the merger seeks to create a more viable domestic payment entity by bringing the schemes together under a single banner and allow solutions to come to market faster, and that he welcomes the ACCC’s ongoing consultation.

“We believe the draft undertakings reinforce our commitment to facilitate LCR and maintain eftpos’ services and infrastructure,” Milliner said.

“They also reflect the agreement to deliver a set of specific payments innovations (described as prescribed services) over the next two years – the majority of which will strengthen eftpos and its ability to compete with international card schemes.”

However, the ACCC wants to hear from merchants and other industry participants on the measures put forward, after stating in June it wasn’t satisfied the merger, in its original context, wouldn’t lead to a lessening of competition.

This was a view the National Retail Association shared, stating in its submission to the ACCC that is was concerned a “marriage between big banks and large retailers would lock out small businesses” and “erode competition between electronic providers and ultimately fail to address the key issue of Least Cost Routing”.

“The reality is that the path to lower prices almost always involves enhanced competition,” the NRA said in its submission.

“The notion that a union involving the big banks and large payment providers would lead to a more competitive environment is highly difficult to imagine.”

The Pharmacy Guild of Australia, and the Australian Lottery and Newsagents Association, also expressed concerns around the public benefits of the deal – with the ALNA stating the long list of potential public beneifts claimed by NewCo’s submission to be “either illusory or private benefits.”

“There is no hard evidence of public benefits, just wishful thinking.”

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