MEDIA RELEASE No: 2002-07 Date: 18 March 2002 Embargo: For Immediate Release

REFORM OF CREDIT CARD SCHEMES IN AUSTRALIA

In December 2001, the Reserve Bank of Australia released, for public discussion, a Consultation Document outlining proposed reforms to credit card schemes in Australia. The proposed reform measures will apply to the credit card schemes operated in Australia by Bankcard, MasterCard and Visa, which were formally "designated" by the Reserve Bank as payment systems subject to its regulation in April 2001.

When releasing the Consultation Document, the Reserve Bank invited interested parties to make submissions on the proposals by 15 March 2002. Submissions have now been received from more than 25 different organisations, including the credit card schemes, banks and other deposit-taking institutions which are members of the schemes, retailers, major companies and utilities, and consumers. Submissions which organisations consent to make public are being made available on the Reserve Bank's website (www.rba.gov.au). A number of members of the public also offered comments.

The Reserve Bank will carefully consider the submissions and will provide the organisations concerned with the opportunity for discussions. This process is expected to take several months and the Reserve Bank does not expect to finalise the reform measures before end June 2002 at the earliest.

As foreshadowed in the Consultation Document, the Reserve Bank has been consulting with the three party card schemes, American Express and Diners Club, on why the Bank's proposed standard on merchant pricing - which would ensure that merchants are free to recover credit and charge card costs from their cardholders - should not apply to them.