Media Release Payments System Issues

1. Consultation on EFTPOS Interchange Fee Regulation

As noted in the Reserve Bank's Media Release on 26 August 2009, the Payments System Board is considering changes to the regulation of interchange fees in the EFTPOS system. The proposed change to EFTPOS interchange regulation is intended to ensure that competition between EFTPOS and scheme debit is conducted on a level playing field. The change does not imply that interchange fees in the different systems should be equal, only that they are subject to equivalent regulation.

The need for this change flows from the Board's decision in August 2009 to defer consideration of any further reduction in interchange fees and to maintain the current interchange regulations for the time being. The Board has for many years been of the view that if interchange regulation is to be maintained on the debit card systems, it should be consistent across schemes.

A short paper setting out the proposal and a draft Standard are attached. Submissions on the proposed changes are invited by 23 October and should be sent to:

Head of Payments Policy
Payments Policy Department
Reserve Bank of Australia
GPO Box 3947
Sydney NSW 2001

or

pysubmissions@rba.gov.au

All submissions will be posted on the Reserve Bank's website and those making submissions will be provided with an opportunity to discuss their submission with Reserve Bank staff.

2. 2008/09 Assessment of Clearing and Settlement Facilities

The Reserve Bank is today publishing its 2008/09 Assessment of Australia's clearing and settlement facilities against the Financial Stability Standards.

The Assessment concludes that all four licensed facilities^[1] complied with the relevant Financial Stability Standards during the 2008/09 assessment period but highlights a number of areas that are worthy of further consideration over the period ahead. Furthermore, since the assessment period was characterised by a high level of volatility in financial markets, the 2008/09 Assessment also examines the facilities’ response to challenges posed by market volatility. While all four licensed facilities were resilient to the turbulent market conditions during this period, one recommendation flowing from review of these events is that Australian Clearing House (ACH) consider introducing routine margining of cash equity positions. The Reserve Bank understands that ACH will be consulting on this as part of a broader consultation on the central counterparties’ risk controls in the near future.

3. 2009 Self-Assessment of the Reserve Bank Information and Transfer System

The Reserve Bank recently completed a self-assessment of RITS, Australia's real-time gross settlement system, against the Core Principles for Systemically Important Payment Systems developed by the Bank for International Settlements’ Committee on Payment and Settlement Systems.

The 2009 self-assessment updates an assessment carried out in 2005 and concludes that RITS continues to comply with the Core Principles. Since 2005, the Reserve Bank has implemented a number of changes, including upgrades of the operating system and hardware to keep pace with technological developments, and enhancement to business-continuity and information-security arrangements in accordance with international best practice.