A Variation to the Access Regime for the ATM System: Conclusions – August 2012 2. Background and Current Issue

In 2009, the Bank put in place the Access Regime as part of a broader set of industry-led reforms to improve efficiency and competition in the ATM system.[1] Among other elements, the Access Regime prohibits the payment of interchange fees between participants in the ATM system except in two sets of circumstances: where a common multilateral interchange fee is paid between members of an ATM sub-network, and where a fee is paid in respect of a one-way arrangement (in which an institution pays an interchange fee to an ATM network owner so that the institution's customers can access the network without paying a direct charge).

The Bank considered these exceptions to benefit competition by allowing smaller financial institutions to provide their cardholders with direct charge-free access to a larger network of ATMs than they would be able to provide themselves. At the same time, the Bank sought to avoid the possibility that these exceptions would lead to the redevelopment of a network of bilateral interchange fees. The current Access Regime therefore prevents an issuer from putting in place more than a single one-way arrangement, and from being both a payer and receiver of interchange fees under one-way arrangements.

Given the variety and complexity of business arrangements in the ATM system, it was recognised at the time that it would be desirable to have some additional flexibility over the prohibition on interchange fees. The current Access Regime therefore includes a provision (paragraph 16) that allows the Bank to grant an exemption to the prohibition under certain circumstances, and sets out the matters that the Bank will have regard to when granting such an exemption. That exemption power, however, does not extend to the provision that prevents a participant from being both a payer and receiver of interchange fees under one-way arrangements.

The Bank's view is that the exemption power in the current Access Regime is too narrow. It is now aware of possible circumstances where an ATM market participant may be both a payer and receiver of interchange fees under one-way arrangements and where such an arrangement is consistent with the intent and purpose of the Access Regime. One such arrangement is a scheme that has been proposed by the ATM industry, in line with recommendations made by the joint Treasury/Reserve Bank ATM Taskforce, to help reduce the sizeable expenditure on ATM fees by residents of very remote Indigenous communities.[2] The proposal, which involves providing direct charge-free access to ATMs for the residents of these communities who are customers of the participating financial institutions, may involve some ATM market participants that already receive interchange fees in existing one-way arrangements also being required to pay fees in one-way arrangements established for the purpose of the scheme.


See Reserve Bank of Australia (2009), An Access Regime for the ATM System, February. Available at <https://www.rba.gov.au/payments-and-infrastructure/atms/access-regime/>. [1]

A typical cardholder living in a very remote Indigenous community spends much more on ATM transactions than other Australians. This reflects a lack of alternatives to paying a direct charge each time these cardholders need to make a balance enquiry or withdraw cash, given that they typically only have access to an independently owned ATM for their banking needs and, therefore, do not have access to charge-free ATM services. For more detail, see Treasury and Reserve Bank of Australia (2011), ATM Taskforce – Report on Indigenous ATM Issues, released on 25 May 2012. Available at <http://archive.treasury.gov.au/banking/content/reports/atm_indigenous/contents.asp>. [2]