RDP 2014-14: The Evolution of Payment Costs in Australia Appendix D: Description of Survey of SMEs

The survey was designed by Reserve Bank staff – in consultation with advice from a number of industry associations and the Australian Bureau of Statistics – to be answered by SMEs who receive payments directly from consumers; instructions and a link to the survey questions were available on the Bank's website. The survey could be answered anonymously and was open between 2 June and 11 July 2014.

Businesses in a large range of sectors were approached to participate by their industry associations. The final sample consisted of around 260 entities, with 40 per cent from the goods retail sector, about half from professional and personal services firms and the remainder from the food and hospitality sector. The vast majority of the sample reported annual revenue of between $100,000 and $10 million. The sample was not stratified to be representative across industries or business size and so the results are only indicative of how the payment acceptance costs incurred by SMEs can differ from those for larger businesses.

The survey covered two main topics: acceptance and surcharging of various payment methods; and the costs of acceptance. Three cost areas were considered: the cost of time spent on various tasks; the cost of fraud; and the cost of fees paid to financial institutions. Information on the average wage was also collected and combined with information on tender times from the large business survey to calculate the costs related to tender time. Questions were designed to be answered using information from bank statements and fee statements from acquirers or other service providers. Questions about fees were staggered to first gather total fees, which are easier to identify on statements, and then component fees, where possible.

The response rate to individual components of the survey varied, affected both by the level of complexity of the specific question and attrition through the 20–30 minute survey. Results relating to acceptance and surcharging were based on 234 responses (close to the full sample), the component costs of cash were calculated using 123–194 responses, the component costs of eftpos, MasterCard & Visa transactions using 94–146 responses and the component costs of American Express from around 38 responses. The detailed split between MasterCard & Visa debit and credit transaction costs was based on a smaller sample of 31 responses. Due to both lower rates of acceptance and low response rates to these questions, the costs for direct debit/credit and BPAY were not presented.

Supplementary data on acceptance and surcharging were collected for the Reserve Bank by the NSW Business Chamber in its quarterly survey of economic conditions. This sample consisted of over 900 responses, from a broad range of businesses. The NSW Business Chamber sample may include large businesses and businesses that receive payments from other businesses rather than from consumers. To limit the sample to only consumer-facing businesses, respondents in industries that are likely to service other businesses (rather than consumers) were excluded from the NSW Business Chamber sample leaving 508 respondents.