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Commonwealth Bank of Australia (CBA) has announced it will be automating least-cost routing (LCR) for transactions between Eftpos and international schemes, such as Mastercard and Visa.
In conjunction to automating routing transactions, the bank also announced it will introduce a flat rate of 1.1% for all in-store card transactions and 1.5% for all online payment transactions, regardless of the interchange rate or the type of card.
The bank noted that eligible small business customers with turnover equal or less than AU$250,000 will see the new rates automatically applied from October 2021, while businesses with revenue higher than the threshold will be able to opt-in.
“The overwhelming feedback from our small business customers is that they want simple competitive pricing without the hassle. They want the benefit from least cost routing without having to manage the routing themselves,” CBA everyday business banking executive general manager James Fowle said.
“Our new flat rates are designed to offer that by removing complex pricing structures and managing the routing of transactions for them. We’ll automatically and centrally route transactions in the most cost effective and competitive way, saving businesses a lot of time and money”
CBA added it will automatically waive three months of merchant fees for small businesses from September to November, which it claims will equate to saving merchants more than AU$7 million.
Last month, Eftpos announced plans it would spend another AU$30 million on digital upgrades to its network over the next year, including new security features.
According to Eftpos, the new features would mean online transactions, including LCR, would enter the market with “significantly” less risk to traditional security vulnerabilities.
The AU$30 million adds to the AU$70 million Eftpos has already spent on its network over the last four years.
