RETAILERS’ CLAIM FALSE Sydney, 12 December , 2003: Banks, Building Societies and Credit Unions described the retailers’ claim that savings from credit card reforms would be eliminated by a zero EFTPOS interchange fee as false. There is no evidence to support this claim, and we call on retailers to work constructively with financial institutions to ensure a smooth implementation period to benefit consumers.   In a media release issued yesterday, the Australian Retailers’ Association claimed that:   “Savings delivered through credit card reforms would be more than eliminated by a zero EFTPOS interchange fee, and this would mean only one thing – higher prices for consumers,”   That statement is not true.   Retailers are major beneficiaries of payments systems reforms initiated and promoted by the Reserve Bank of Australia (RBA). The following table demonstrates this benefit.   Overall retailers/merchant savings from payments systems reform   $million, annual Credit cards* 350 EFTPOS/debit* -150 ATM** 0 Total merchant saving ($million) 200 *Data taken from Reserve Bank EFTPOS submission lodged with the ACCC on 21 March 2003.Figures represent changes in acquirer costs which are approximated to represent changes in overall merchant costs through Merchant Service Fees (MSF). It should be noted that individual merchant impacts will depend upon the merchants' relative payments mix. The figures do not represent merchant savings stemming from increased EFTPOS use relative to credit card use. These savings could be significant long-term. **ABA assumption that ATM reform will have marginal (zero) impact on merchant costs.   The only reason overall prices will not fall as a result of payments systems reform is if Australia’s retailers don’t pass onto consumers the $200 million in net savings.     Delay to EFTPOS reform implementation, the clear strategy behind the retailers’ appeal to the Competition Tribunal, will deprive EFTPOS card users and the wider community reform benefits.   Together, the reforms to credit and debit cards will send improved signals to consumers about the relative costs of different means of payment and, by encouraging the increasing the use of EFTPOS, should ultimately reduce those costs for both merchants and consumers.   For further information:   Heather Wellard (ABA) Phone: (02) 8298 0411 Mobile: 0409 830 439   Luke Lawler (CUSCAL) Phone: 02 6232 6666 Mobile:0418 213 025   John Toms (AAPBS) Phone: 02 6281 1588 Mobile:0419 000 206   ENDS