Reform of Australia's Payments System Glossary of Terms and Abbreviations

ACCC Australian Competition and Consumer Commission
Acquirer An institution that provides a merchant with facilities to accept card payments and clears and settles the resulting obligations with card issuers.
ADI Authorised Deposit-taking Institution. A body corporate authorised to undertake banking business in Australia. ADIs are authorised and regulated by APRA under the Banking Act 1959.
APCA Australian Payments Clearing Association
APRA Australian Prudential Regulation Authority
BPAY A payments organisation owned by a group of retail banks. Individuals who hold accounts with a BPAY participating financial institution can pay BPAY billers using electronic transfers initiated by phone or internet.
Card issuer An institution that provides its customers with debit, credit or other payment cards.
Charge card A card whose holder has been granted a non-revolving credit line, enabling the holder to make purchases and possibly cash advances. A charge card does not offer extended credit; the full amount of any debt incurred must be settled at the end of a specified period.
Credit card A card whose holder has been granted a revolving credit line. The card enables the holder to make purchases and/or cash advances up to a pre-arranged limit. The credit granted can be settled in full by the end of a specified period, or in part, with the balance taken as extended credit.
Debit card A card that enables the holder to access funds in a deposit account at an ADI.
Designation The first formal step by the Reserve Bank toward exercising powers conferred by the Payment Systems (Regulation) Act 1998. The Bank may subsequently impose standards or access regimes on a designated system, or arbitrate a dispute in relation to the system.
Direct entry system A system used for bulk or batch-processed payment transfers between deposit accounts, typically on a next-day settling basis.
EFTPOS Electronic Funds Transfer at Point of Sale. In Australia, EFTPOS transactions are authorised by personal identification number (PIN) and make use of processing infrastructure owned and operated by the domestic financial institutions.
Four-party card scheme MasterCard and Visa are known as ‘four-party’ card schemes because four parties are typically involved in the payment process. The four parties are: the cardholder; the issuer; the acquirer; and the merchant.
Honour-all-cards rule A rule that requires participating merchants to accept all cards issued under a particular scheme.
Interchange fee A fee paid by the card acquirer to the card issuer, or vice versa, when a cardholder undertakes a transaction.
Merchant service fee A per-transaction or ad valorem fee paid by a merchant to the acquirer when a cardholder undertakes a transaction.
No-steering rule A rule that prevents merchants from steering cardholders to other forms of payment.
No-surcharge rule A rule that prevents merchants from charging a fee for card transactions.
Pre-paid card A card ‘loaded’ with a given value, paid for in advance. The card may be reloadable, or limited to initial purchase value.
Revolvers Credit card holders who do not pay off their account in full by the end of the interest-free period.
Scheme debit card A debit card issued under one of the international card schemes. Funds are drawn from the cardholder's deposit account at an ADI, utilising the processing infrastructure of the card scheme, rather than the EFTPOS system.
Scheme fees Fees paid by both acquirers and card issuers to the card scheme.
Specialist Credit Card Institution An ADI that engages in, or proposes to engage in, card issuing and/or acquiring, but does not otherwise conduct banking business.
Switch A system that facilitates the exchange of payment messages between participants in a payment system.
Three-party card scheme American Express and Diners Club are known as ‘three-party’ schemes. These schemes generally (although not always) act as sole issuers and acquirers, therefore the three parties involved in the payment process are the cardholder, the merchant and the scheme.
Transactors Credit card holders who pay the full outstanding balance on their account by the end of the interest-free period.