Small businesses are being gouged by bank fees while big business gets off lightly, Reserve Bank data shows.
Small business owners are paying up to 10 times more in bank fees than big business, with small businesses paying as much as 2.0 per cent in interchange fees for transactions that would cost a big business 0.20 per cent, according to the RBA Payment Systems Board annual report.
The interchange fee, to process credit and debit card transactions, is charged by the customers' bank to the business' bank and then passed on to the business.
In its annual report, the board said the cost of higher interchange rates tended to fall on medium- and small-sized businesses and businesses that don't benefit from strategic rates.
"The same card when presented to a merchant with lowest strategic risk will carry an interchange fee of 0.20 or 0.23 per cent, but will have a fee of 2.0 per cent for a merchant that doesn't benefit from preferential arrangements," the board said.
Jost Stollmann, chief executive of independent EFTPOS provider Tyro, said the inequality was making it hard for small business to survive as Australia moves toward being a cashless society.
Australians spent $434 billion on credit and debit cards in 2012/13, he said.
"Small- and medium-sized businesses employ more than seven million Australians, yet they are having to compete with financial lead in their saddle bags, courtesy of our major banks," Mr Stollmann said.
"Small businesses are caught in a Catch 22 - pass on the higher bank fees and lose customers, or absorb the costs and lose profits.
"This is unfair, it is inequitable and truly indefensible."
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