Visa yields on interchange in NZ
(17 August 09 – New Zealand) Visa Inc and the New Zealand Commerce Commission have settled out of court in a case alleging that Visa’s interchange and other scheme rules breached the restrictive trade practices sections of the New Zealand Commerce Act.
Under the settlement, Visa has agreed to make a number of changes to its existing scheme rules in New Zealand.
Visa will set and publicly release maximum interchange fee amounts, allowing acquirers and issuers to individually negotiate fees up to these maximum levels.
In addition, the ‘no surcharge’ rule will now be removed for Visa credit cards, allowing NZ merchants to surcharge these transactions should they wish to steer customers to other payment methods.
The settlement also ends some access restrictions in the New Zealand acquiring market, with approved non-bank organisations now allowed to participate in the Visa network and provide acquiring services.
As a part of the settlement, all legal action against Visa will be discontinued and the company has agreed to contribute NZD2.6 million to cover the Commerce Commission’s legal costs to date.
The related case over interchange and other market practices against the major New Zealand banks and MasterCard continues, with a High Court hearing scheduled to take place in October this year.
The agreed changes to Visa scheme rules are similar in nature to the payment system regulations introduced by the Reserve Bank of Australia since 2003 and come at a time when a number of international watchdogs – most notably in the US, Canada and the UK – are scrutinising interchange and other arrangements in credit card markets.
Visa will set and publicly release maximum interchange fee amounts, allowing acquirers and issuers to individually negotiate fees up to these maximum levels.
In addition, the ‘no surcharge’ rule will now be removed for Visa credit cards, allowing NZ merchants to surcharge these transactions should they wish to steer customers to other payment methods.
The settlement also ends some access restrictions in the New Zealand acquiring market, with approved non-bank organisations now allowed to participate in the Visa network and provide acquiring services.
As a part of the settlement, all legal action against Visa will be discontinued and the company has agreed to contribute NZD2.6 million to cover the Commerce Commission’s legal costs to date.
The related case over interchange and other market practices against the major New Zealand banks and MasterCard continues, with a High Court hearing scheduled to take place in October this year.
The agreed changes to Visa scheme rules are similar in nature to the payment system regulations introduced by the Reserve Bank of Australia since 2003 and come at a time when a number of international watchdogs – most notably in the US, Canada and the UK – are scrutinising interchange and other arrangements in credit card markets.
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