Australia’s customer owned banking institutions are being pressured to agree to an unfair pricing policy by Australia Post as it targets smaller institutions to pay excessive charges for access to Bank@Post, according to a COBA press release.
Despite Australia Post CEO Christine Holgate publicly ruling out applying a Community Representation Fee (CRF) to smaller banking institutions in front of a Senate Estimates Committee in October last year, customer owned banking institutions are being pressured to agree to colossal new fees.
Under Australia Post’s scheme, mutual banks and credit
unions will be forced to either pay a tremendously exorbitant CRF or their
customers will no longer be able to do their banking via Bank@Post.
The fees are so significant and disproportionate that in some cases they equate
to almost 80 per cent of annual profit. This is compared to approximately 0.2
per cent for the ‘Big Four’ banks.
Customer owned banking institutions were initially given a handful of weeks to
make a decision, however Australia Post has committed to a two-month extension.
The extension is a welcome concession after the ‘Big Four’ banks received nine
months to review and consider three different proposals.
Australia Post’s tactics are expected to primarily impact older Australians,
particularly in rural and regional areas. For one member, 70 per cent of its
customers that transacted via Bank@Post for the 2018 calendar year were 50
years of age or over. Of that group 66% were over 60 years of age.
CEO of the Customer Owned Banking Association Mike Lawrence said members were
willing to pay their fair share but shouldn’t be picking up the tab for the
‘Big Four’s’ branch closures.
“The way Australia Post has engaged with customer owned banking institutions is
certainly surprising from an organisation that the CEO claims is Australia’s
most trusted brand.
“Customer owned banking institutions are happy to pay their fair share for a
service, but should not be forced to cover costs created by the ‘Big Four’
banks.
“The major banks are responsible for the vast majority of branch closures, 85
per cent of Bank@Post transaction volumes and bank most of the small business
clients that rely on large cash floats.
“It should fall to them, not smaller banking institutions that primarily use
Bank@Post for retail consumers, to make up the cost short-fall.
“After failing to get all of the ‘Big Four’ to sign onto the new pricing model
Australia Post has put the pressure on smaller customer owned banking
institutions to cover fees that are being generated by the ‘Big Four’.”
Mr Lawrence said COBA members were urging the Government to intervene to
protect consumers in regional areas and maintain competition in the banking
sector.
“This behaviour will have an enormous impact on Australians in regional and
rural areas. If smaller institutions are forced to withdraw, customers will be
forced to travel long distances to do their banking, or where that isn’t an
option, have to switch banks.
“If the Financial Services Royal Commission taught us anything, its that
customers need and deserve access to trusted banking alternatives.
“We’re hoping the Government can use its shareholding in Australia Post to stop
the postal service from eroding competition in the banking sector.
“It’s clear that Australia Post has forgotten its role is to meet the needs of
Australian communities. Hopefully the Government can remind it of its purpose.”
Customers of customer owned banking institutions
have been urged to write to Australia Post CEO Christine Holgate and
Communications Minister Mitch Fifield to demand a fairer pricing system by
visiting: fairbankingaustralia.com.au
