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Least-Cost Routing

The Victorian Chamber is committed to working with all levels of government to remove barriers to business growth. With the impacts of COVID-19 affecting many businesses bottom line, every dollar counts. One of the ways we are achieving this is working with the Reserve Bank of Australia (RBA) and financial institutions to share member feedback and advocate for the reduction of banking fees associated with tap-and-go payments.

Least-Cost Routing

When a customer uses tap-and-go to make a payment, a business often has no visibility if eftpos, Mastercard or Visa is processing the payment – all of whom charge different amounts.

This is normally decided by the business’ bank. Businesses can talk to their banks and request that tap-and-go be processed in the cheapest way – setting up a process called Least-Cost Routing.

As more and more customers turn away from cash in the post-coronavirus economy, this is going to become a simple way for businesses to keep transaction costs down. Even small savings will make a difference for businesses in the current economic environment.

Find out how to best approach your bank with our free checklist – download now (member-only)

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