Media Release Payments System Issues: Multi-Network Debit Cards
At its meeting today, the Payments System Board considered the public policy issues relating to multi-network debit cards. These are cards issued by banks and other financial institutions for ATM usage and with debit functionality from more than one payments network. The Board has previously indicated it supports the long-standing practice of issuing such cards in Australia, because they are convenient for cardholders and allow stronger competition between networks at the point of sale.
The Board has discussed issues relating to these cards in several earlier meetings. It has had a number of concerns including regarding: scheme rules that require the provision of commercially sensitive data about one network to a competitor network; the imposition of fees by one network on another network's transactions; and disputes over the placement of network brands on cards. Since then, further issues have arisen between the various networks in the context of contactless debit cards. These developments have the potential, in the Board's view, to inhibit competition, limit choice to consumers, and increase costs.
The Board has discussed the various courses of action that could be available. It notes that there is significant interest among system participants for some ‘rules of the game’ where two networks are seeking access to an issuer's card. It also notes that authorities in other jurisdictions have taken actions that are aimed at helping to ensure that the costs involved in debit card transactions are held down.
The Board has asked the staff to meet again with the parties involved to see if a voluntary agreement can be reached that is acceptable to all parties and also in the public interest. It has authorised a public consultation on the case for regulatory action if an acceptable outcome cannot be reached in an expeditious manner.