Media Release Reform of Debit Card Systems in Australia

The EFTPOS System

Following a meeting of the Payments System Board on 16 December, the Reserve Bank has today gazetted a draft Access Regime for the EFTPOS system, and released a Consultation Document setting out the Bank's reasoning. This Access Regime complements the EFTPOS Access Code developed by the Australian Payments Clearing Association (APCA), which is available on APCA's website ( The Access Regime is relatively limited in scope, given that a number of important access-related issues are dealt with in APCA's Code. The Bank welcomes this co-regulatory approach to payments system reform and the co-operative approach taken by APCA.

The combined effect of APCA's EFTPOS Access Code and the Bank's Access Regime will be to significantly improve access arrangements to Australia's EFTPOS system. The APCA Code will, for the first time, provide new and existing participants the right to establish direct connections with participants in the EFTPOS system, and require that existing participants establish such connections within a specified time frame. The Bank's Access Regime will place a cap on the price that can be charged by existing participants to establish these connections, and it also contains provisions that ensure that negotiations over interchange fees cannot be used to frustrate entry.

The Bank is today also gazetting a revised draft Interchange Standard for the EFTPOS system. This revised Standard proposes that a floor be placed under interchange fees in the EFTPOS system in addition to the cap proposed in the earlier Standard released in February this year. In all other respects, the revised Standard is essentially the same as the earlier Standard. By constraining interchange fees to a relatively narrow range, the amended Standard should ensure that negotiations over interchange fees cannot be used to adversely affect competition, either between existing participants or new entrants. If the revised Standard were to be implemented, interchange fees in the EFTPOS system are likely to lie in a range of around four to five cents, paid to the merchant's financial institution.

The Bank is seeking comments on these proposed reforms. In February this year, the Bank sought and received submissions on the Standards dealing with interchange fees in the EFTPOS and Visa Debit systems and the ‘honour all cards’ rule in the Visa system. Now that the full package of reforms for the debit card systems has been released, further submissions on issues raised by these Standards are also welcome. The Bank intends to consider all issues raised in the earlier consultation and any issues raised in this round of consultation at its next Payments System Board meeting, scheduled for end March 2006.

Submissions on the Bank's proposals should be made by 17 February 2006, and all submissions will be placed on the Bank's website. Those making a submission will have the opportunity to discuss it with the Bank in the second half of February 2006. Submissions should be made to:

Head of Payments Policy
Reserve Bank of Australia
GPO Box 3947


MasterCard Debit

MasterCard has recently launched a debit card product in Australia. Following discussions with the Bank, MasterCard has indicated that it will voluntarily conform with Standards dealing with interchange fees and the ‘honour all cards’ rule should such standards be imposed upon the Visa Debit system.


Philip Lowe
Assistant Governor (Financial System)
Reserve Bank of Australia

Phone: +61 2 9551 8510

John Veale
Head of Payments Policy Department
Reserve Bank of Australia

Phone: +61 2 9551 8710

Manager, Media Office
Information Department
Reserve Bank of Australia

Phone: +61 2 9551 9720
Fax: +61 2 9221 5528