Westpac Banking (ASX:WBC) is set to reduce its Flat Transaction Rate for eligible new and existing customers to 0.79% from Oct. 1, which it said will be the lowest in the market among major banks and merchant acquirers, according to a Thursday statement.

The company said the change is expected to save a typical small business AU$80 a month, or nearly AU$1,000 a year, coinciding with the Reserve Bank of Australia's surcharging ban starting Oct. 1.

From Oct. 1, Westpac's Flat Transaction Rate for EFTPOS terminals and PayWay will be reduced to 0.79% from 1.2%, while EFTPOS Air and OnlinePay customers will see rates reduced to 1.25% from 1.4%, the statement added.

The company's shares fell 2% in recent Thursday trade.