Proposed Changes to the Credit Card Interchange Standard:
A Consultation Document – July 2005
1. Introduction

This Consultation Document proposes a change to the standard on credit card interchange fees. The effect of the change would be to establish a common benchmark interchange fee in the Bankcard, MasterCard and Visa credit card schemes.

The Consultation Document is structured as follows. Section 2 provides some relevant background, including a discussion of the current arrangements for setting interchange fees and the potential for these arrangements to affect competition amongst the credit card schemes. Section 3 summarises the consultation undertaken to date by the Bank on whether a change to current arrangements is warranted. Section 4 discusses the various options considered by the Bank, while Section 5 sets out the proposed modifications to the existing standard. Two alternative standards are proposed for the purposes of consultation. Both would achieve the same objective but would involve different calculation processes for scheme participants. The draft revised standards have been gazetted as required under the Payment Systems (Regulation) Act 1998.

Submissions are invited on the draft revised standard by 23 August 2005. As is usual practice, all submissions will be placed on the Bank's website and an opportunity will be provided to those making submissions to discuss them with the Bank.

Submissions should be addressed to:

Head of Payments Policy
Reserve Bank of Australia
GPO Box 3947