RBA no card sharks, court rules
(Australia) The Reserve Bank of Australia has seen off a legal challenge to its credit card reforms by plastic money giants Visa and Mastercard.
Australia’s Federal Court threw out the case after ruling that the two companies had failed to make a case.
Visa and Mastercard had claimed the RBA had not pursued a correct decision making process and that it had misunderstood or misapplied legislation. However, Justice Brian Tamberlin did not agree with the two companies.
Under the RBA’s new rules, banks must reduce the level of wholesale interchange fees they pay to each other when processing credit card payments. The change is set to come into effect at the beginning of November.
ANZ is one bank that has tried to get around the problem by collaborating with Diners Club to launch two new charge cards.
ANZ managing director, Consumer Finance, Brian Hartzer said the new cards were designed to offer customers the maximum card options in light of the RBA reforms.
"Traditionally, interchange income has been an important offset to the cost of running reward programs. The RBA reforms, which have cut our interchange income by 40 to 50 percent, mean that we have had no choice but to make changes to protect our business and to protect the benefits our customers receive," he said.
Visa and Mastercard had claimed the RBA had not pursued a correct decision making process and that it had misunderstood or misapplied legislation. However, Justice Brian Tamberlin did not agree with the two companies.
Under the RBA’s new rules, banks must reduce the level of wholesale interchange fees they pay to each other when processing credit card payments. The change is set to come into effect at the beginning of November.
ANZ is one bank that has tried to get around the problem by collaborating with Diners Club to launch two new charge cards.
ANZ managing director, Consumer Finance, Brian Hartzer said the new cards were designed to offer customers the maximum card options in light of the RBA reforms.
"Traditionally, interchange income has been an important offset to the cost of running reward programs. The RBA reforms, which have cut our interchange income by 40 to 50 percent, mean that we have had no choice but to make changes to protect our business and to protect the benefits our customers receive," he said.
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