Russell Zimmerman will join Eftpos Australia, the company that runs the debit card payment system of the same name, to lead its least-cost routing efforts from July 1.

Zimmerman was previously the head of the Australian Retailers Association (ARA) for 11 years and has worked in the retail sector for 35 years.

Least-cost routing is a natural next step, he said, given his background advocating for Australian retailers and their customers.

“Joining eftpos to promote lower-cost payments as the economy starts to rebuild after COVID is a natural next step for me,” Zimmerman said in a statement.

Least-cost routing allows retailers to choose how they accept debit card payments at the point of sale and online – via a card scheme like Visa or Mastercard, or through Eftpos’s cheaper cheque/savings option.

It is estimated least-cost routing would save merchants $500 million a year in fees by automatically choosing the cheapest option for each transaction.

But despite the Reserve Bank of Australia (RBA) telling banks as far back as 2018 to support least-cost routing, or risk regulation, they have largely failed to do so.

In 2019, ANZ and Westpac gave merchants the choice of processing debit card payments either through the Eftpos network or the Visa and Mastercard networks, but merchants still couldn’t choose a network based on the cheapest option for each individual transaction.

Earlier this year, the ARA joined the Council of Small Business Australia, Master Grocers Australia and the Australian Convenience and Petroleum Marketers Association in forming the Fairer Merchant Fees Alliance to raise awareness of the benefits of least-cost routing and pressure the RBA to force the banks to implement it.

The RBA recently said it would consider the possibility of requiring banks to offer least-cost routing to all their merchants in its current review of retail payments regulation in the country.

The growth of card payments during COVID-19 due to hygiene concerns about cash has upped the urgency of this issue, the RBA said, since merchants are wearing the costs.

“I expect that there will be action on this issue more quickly now,” Michele Bullock, assistant governor of the RBA, said, according to the AAP.

Zimmerman agreed, saying in a statement that it was more important than ever to promote the benefits of least-cost routing to ensure Australian retailers can reduce the costs associated with electronic payment acceptance.

Stephen Benton, chief executive of Eftpos, said the appointment will help the company better support the retail industry.

“While Russell will focus on helping businesses reduce their costs, he will also consider other ways we can add value for Australian businesses to help them get through this difficult time, deliver better services to their customers and grow for the future,” Benton said.