Big business challenges ACCC over merger of eftpos, BPAY and New Payments Platform

The major banks and retail giants have challenged the ACCC over its concerns surrounding the proposed merger of BPAY, eftpos and the New Payments Platform.

The major banks and retail giants have challenged the ACCC over its concerns surrounding the proposed merger of BPAY, eftpos and the New Payments Platform. Picture: iStock

The major banks and retail giants Woolworths and Coles have challenged the ACCC over its competition concerns surrounding the proposed merger of BPAY, eftpos and the New Payments Platform, arguing that the tie-up will in fact increase competition in the market.

Responding to the ACCC’s preliminary views regarding the merger, released last month, the payments group insisted that the three schemes did not compete with each other across payments infrastructure.

Robert Milliner, the chairman of the industry committee overseeing the merger on behalf of the three parties, said the applicants were seeking to merge eftpos, BPAY and NPP to improve competition.

“An efficient merged entity will be better able to compete against the international card schemes who currently dominate the market,” he said.

Visa and MasterCard have revenues of $US21bn and $US15bn, comparewith eftpos, BPAY Group and NPP, all of which have annual revenues of less than $75m, he added.

“By bringing the three schemes under a single board, they will be able to bring new payments solutions to market faster, continue to put pricing pressure on international card schemes and work in the best interests of Australian consumers and businesses of all sizes.”

BPay, eftpos and NPP are owned by the major banks, while Coles and Woolworths are eftpos shareholders. The parties agreed to merge in December with a view to completing the deal in the second half of 2021.

The ACCC in June said it was considering whether the proposed merger would result in “a substantial lessening of competition” arising from reduced incentives between the parties to compete where their services overlap or are likely to do so in the future.

The competition watchdog also said it was considering the impact of a reduction in eftpos’ capability as well as the potential for third-party access to the NPP being denied or frustrated.

Council of Small Business of Australia CEO Peter Strong. Picture: AAP

The proposed merger has raised concerns among retailers and small businesses, with COSBOA chief executive Peter Strong in his submission arguing that “over time, competition in the financial services of payments would be significantly reduced by this merger”.

Chief among the concerns is the Least Cost Routing initiative, which helps merchants reduce transaction fees. The ACCC last month said it was assessing concerns that least-cost routing may be neglected or abandoned.

But the payments group shot down the suggestion that it would be affected by the tie-up.

“In order for eftpos to remain a source of competitive pricing tension with international card schemes and thus sustain least-cost routing, we need a more efficient and competitive domestic scheme which this merger is seeking to create,” Mr Milliner said.

The ACCC will hand down its final decision this month.