Media Release Payments System Issues
Revised EFTPOS Interchange Fee Standard
At its meeting on 23 November 2009, the Payments System Board decided to amend the EFTPOS interchange fee Standard to make the regulation of EFTPOS interchange fees more consistent with that for scheme debit interchange fees. The amended Standard caps the weighted average of any multilateral interchange fees in the EFTPOS system at the same level as for scheme debit – 12 cents paid to the issuer. It leaves the regulation of bilateral interchange fees unchanged – between 4 and 5 cents paid to the acquirer for purchase transactions.
These changes are intended to facilitate and stimulate competition between EFTPOS and the scheme debit systems. Since current bilateral interchange fees already comply with the amended Standard, however, there will be no immediate need for changes to be made to interchange fees in the EFTPOS system. Decisions about the level of interchange fees, subject to the more flexible cap for multilateral interchange fees, will be made by the newly established EFTPOS scheme, EFTPOS Payments Australia Limited. The Board expects that any such changes will be made with a view to enhancing competition in the debit card market in Australia.
The decision to amend the EFTPOS interchange fee Standard reflects the Board's long-standing view that the regulatory treatment of interchange fees should be as consistent as possible across the EFTPOS and scheme debit systems. Following a decision in August 2009 to maintain the current overarching regulatory regime for card payments for the time being, the Board initiated consultation on a change to regulation of EFTPOS interchange fees to ensure a more level playing field between the EFTPOS and scheme debit systems until the final regulatory landscape is decided. The Reserve Bank received 16 submissions on the proposal. As a result of the views expressed in these 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. Details on the amended Standard and the Board's reasoning are contained in A Revised Interchange Standard for the EFTPOS System. The amended Standard comes into force on 1 January 2010.
Approval under the Payment Systems and Netting Act 1998
BPAY has applied to the Reserve Bank for the multilateral netting arrangement administered by it to be approved under section 12 of the Payment Systems and Netting Act 1998 (the Act). After considering the criteria set out in the Act, the Board approved the application at its meeting on 23 November 2009.
The approval is subject to a number of rule changes being made by BPAY. Once this process is complete, the Reserve Bank will issue a formal approval. This approval will protect the netting undertaken by BPAY from legal challenge in the event that a participant in the netting arrangement enters external administration.
Assistant Governor (Financial System)
Reserve Bank of Australia
Phone: +61 2 9551 8510
Head of Payments Policy
Payments Policy Department
Reserve Bank of Australia
Phone: +61 2 9551 8710