Access Regime for the ATM System: A Consultation Document – December 2008 1. Introduction

This Consultation Document seeks views from interested parties on a proposed Access Regime for the ATM system.

The decision by the Payments System Board to consider an access regime for the ATM system comes after many years of industry-based efforts, supported by the Reserve Bank, to improve competition and efficiency in the ATM system. While the industry has made considerable progress in implementing the technical aspects of a reform package, it recently wrote to the Reserve Bank requesting the designation of the ATM system, and regulation by the Bank, in order to give greater legal certainty to aspects of the reforms.

The Board has long encouraged industry-based solutions to issues of competition and effi ciency in the payments system. Indeed, in its recent review of Australia's payments system reforms, the Board indicated that it was prepared to step back from regulation of interchange fees in the credit and debit card systems if industry took further steps to improve competition and effi ciency.[1] Consistent with this philosophy, the Board would have preferred an outcome for reform of the ATM system that did not involve regulation. But, in the current circumstances, it is prepared to consider regulation in the public interest so as to ensure that the industry meets its agreed implementation date of 3 March 2009.

The proposed Access Regime has two features. First, it eliminates the payment of interchange fees among the direct participants in the ATM system. This addresses the concern that negotiations over interchange fees, which are a price of access for new entrants, could be used in a way that limits competition from new entrants. Second, it sets a cap on the price that a new entrant can be charged to set up a direct connection with another direct participant. Other aspects of access – including the rights of access seekers, obligations on access providers, the process of access and implementation time lines – will be addressed through the industry-developed ATM Access Code, a draft of which has been released by the Australian Payments Clearing Association (APCA) for public comment.[2]

While the Board is prepared to introduce an Access Regime to support the industry Access Code, it remains concerned about the diffi culties that the current bilateral architecture in the ATM system poses for new entrants. In the Final Conclusions of the review of the payments system reforms, the Board encouraged the industry, as a matter of priority, to examine alternative access arrangements that would allow entry without the need to establish a multitude of bilateral connections. Although the proposed industry Access Code represents an improvement on current arrangements, it does not address this issue. Accordingly, the Board views the Access Code and the Access Regime as only a temporary solution to the current access issues. If more fundamental access reform has not occurred by March 2010, the Board will consider alternative approaches to improving access arrangements, including the possibility of setting technical standards to require the industry to implement a more access-friendly network.

This Consultation Document sets out the proposed Access Regime. Section 2 provides background on the ATM system in Australia. Section 3 discusses the reform process to date, including the issues that have been identifi ed with the current system and the evolution of the reform proposal. Section 4then outlines why a regulatory approach is being considered for some elements of the reforms. Section 5 sets out the proposed Access Regime. Section 6 discusses the need for more fundamental reform of the ATM system architecture.

The Bank invites submissions from interested parties on the proposed regime by 16 January 2009. All submissions will be posted on the Bank's website ( and parties making submissions will have the opportunity to discuss them with the Bank. Submissions should be sent to:

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



Reserve Bank of Australia (2008), Reform of Australia's Payments System: Conclusions of the 2007/08 Review, September. [1]

See <>. [2]