Scheme gives EFTPOS leg up
(30 November 2009 – Australia) The Reserve Bank of Australia’s (RBA), Payments Systems Board, has decided to amend the regulation of EFTPOS interchange fees to stimulate competition between the payment platforms.
In September this year, the Payments System Board proposed changes to the regulation of interchange fees in the EFTPOS system to also ensure that competition between EFTPOS and scheme debit is conducted on a level playing field.
The Reserve Bank received 16 submissions on the proposal.
As a result of the views expressed in the submissions and in meetings with Reserve Bank staff, the Board altered its initial proposal by retaining existing regulation for bilateral interchange fees, rather than easing constraints on both multilateral and bilateral interchange fees.
The amended Standard comes into force on 1 January 2010.
The Board’s initial proposal considered applying the current regulatory framework for scheme debit – a cap on weighted-average interchange fees of 12 cents per transaction – to EFTPOS interchange fees.
The changes will come after many years of concern from the board about the nature of competition between EFTPOS and scheme debit.
The reason for standardising the treatment in this way is that such a regime is more flexible than that currently applying to EFTPOS, in which interchange fees on purchase transactions are restricted to be between 4 and 5 cents paid to the acquirer.
The Reserve Bank received 16 submissions on the proposal.
As a result of the views expressed in the submissions and in meetings with Reserve Bank staff, the Board altered its initial proposal by retaining existing regulation for bilateral interchange fees, rather than easing constraints on both multilateral and bilateral interchange fees.
The amended Standard comes into force on 1 January 2010.
The Board’s initial proposal considered applying the current regulatory framework for scheme debit – a cap on weighted-average interchange fees of 12 cents per transaction – to EFTPOS interchange fees.
The changes will come after many years of concern from the board about the nature of competition between EFTPOS and scheme debit.
The reason for standardising the treatment in this way is that such a regime is more flexible than that currently applying to EFTPOS, in which interchange fees on purchase transactions are restricted to be between 4 and 5 cents paid to the acquirer.
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