ANZ Banking Corp is refusing to pay Australia Post a new $22 million-a-year fee for access to its branches, on the basis it’s unfair by effectively requiring ANZ to subsidise its larger rivals, Commonwealth Bank and Westpac.
ANZ chief executive Shayne Elliott said Australia Post is asking ANZ to pay three to four times as much per transaction as CBA is paying to put transactions through post offices, because a flat-fee structure penalises smaller banks.
“We don’t think that’s fair,” he told The Australian Financial Review in an interview on the sidelines of the Sibos conference in Sydney.
The fee dispute has emerged ahead of an appearance by Australia Post CEO Christine Holgate before the Senate’s environment and communication legislation committee in Canberra on Tuesday morning. Australia Post last week threatened to cut ANZ’s customers off its service when its existing contract comes to an end in three months.
The post office hasn’t previously required the banks to pay an access fee, which is being levied in addition to transaction fees.
Last week, Westpac and National Australia Bank agreed to the $22 million annual “community access fee”, on top of the per transaction fee of between $2.50 and $3. That came after CBA moved first to sign the new deal.
‘We will look to alternatives’
Mr Elliott said he agreed the per transaction fee in the previous three year contracts had been underpriced and he said ANZ would be willing to pay perhaps two to three times more per transaction.
“I’ve heard the post offices talk about the transaction fee being too low – I think they are right. We would totally agree to a significant increase,” he said. “But our understanding is the access fee is not negotiable. We don’t need to agree to it. We will look to alternatives.”
“I have to live in the real world of fee-for-service. I don’t ask people to pay to access my branch network in case they need it but that’s essentially what we are being asked to do.”
“From our perspective we think it is an unfair structure. When you work out how much it will cost per transaction, the Sydney banks get a much cheaper deal than I do. In fact, we would end up paying three to four times what they are for the same service per transaction.”
Mr Elliott said it didn’t make any commercial sense that the new community access fee represented five times the amount of the transaction fee for ANZ on a per transaction basis.
It is understood there are about 900 ANZ commercial customers not within 20 kilometres of an ANZ branch who use Australia Post for business banking services, mostly making deposits of coins.
Around 1200 ANZ retail customers are also using Australia Post branches, with many simply making withdrawals that can be conducted via an ATM or paying bills that can be done via BPay.
Australia Post made $134 million in after-tax profit last year. The banks are concerned it might be seeking to charge banks to make up from declining revenue from stamps, which is making the economics of post offices more challenging.