Review of Payments System Regulation Summary of Submissions to the Review of Payments System Regulation Issues Paper

6. Other Issues

Some stakeholders asked the RBA to consider taking regulatory action on other issues including:

• Four-party scheme fees. Some stakeholders raised concerns about the opacity of fee structures, the possibility that upcoming reductions in interchange caps could be offset by increases in scheme fees, and that the existing Scheme Fee Roadmaps may not be sufficient to address concerns regarding the efficiency of fee levels and structures. These stakeholders suggested the RBA should consider:
  • more granular or transaction-level fee disclosure
  • continued assessment of Scheme Fee Roadmap outcomes
  • preventing schemes from replacing or relabelling fees
  • further assessment of issues related to schemes with a view to determining whether formal regulation is necessary.
• Dynamic LCR. Some merchant representatives suggested the RBA should mandate dynamic LCR to place additional competitive pressure on wholesale debit fees and increase resilience.
• Unblended pricing. Some merchant representatives asked the RBA to mandate that PSPs must offer unblended pricing, such as interchange++ pricing, which would facilitate the pass-through of savings from LCR to merchants.
• System-wide resilience and outage transparency. Several stakeholders suggested the RBA should consider further action to support system-wide resilience, noting an increase in the frequency and duration of outages for card services, the NPP and Direct Entry over recent years. Suggestions put forward included common minimum resilience and assurance expectations for critical payment infrastructure, regular attestations and industry reporting on tested recovery capability.
• Disputes and chargebacks. A few stakeholders raised concerns with the existing chargeback and dispute arrangements, stating that they were inconsistent and imposed significant costs on participants. These submissions noted the recent and projected growth in chargeback volumes, as well as concerns that existing chargeback processes do not provide small businesses with an impartial avenue to challenge allegedly fraudulent chargebacks.
• E-conveyancing. A submission stated that the RBA should take action to increase interoperability, competition and resilience in e-conveyancing.
• Digitally transmitted stored value. A stakeholder requested greater focus on the delivery and availability of digital gift cards and similar instruments to recipients, rather than treating issuance or dispatch as proof of completion. It suggested the RBA should collect further information to assess the case for intervention.
• Exempting salary packaging providers from payments regulation. A stakeholder noted that, for those providers, payments are incidental to the provision of salary packaging services.
• Access to cash. A few stakeholders supported further work to ensure continued access to cash.

Some stakeholders also suggested that, in setting its regulatory priorities, the RBA should consider:

• The economic sustainability and capability of the domestic payments industry. Some issuers and their industry representatives stated that payments regulation should consider whether the economics of the system support continued investment in domestic payments infrastructure.
• Regulation that is technology-neutral, proportionate and evidence-based. A range of stakeholders supported regulation that focused on activities, functions, risks and outcomes rather than particular technologies, providers or business models. They generally supported intervention that is proportionate to the scale and risk of the harm. Some stakeholders cautioned that prescriptive or duplicative requirements could impose disproportionate costs, impede innovation or disadvantage smaller participants.
• Regulatory coordination with other reform programs. Several stakeholders called for coordination between the RBA and other agencies or regulatory processes to avoid duplication and undue costs. Submissions noted the overlap of potential RBA regulation with other regulatory or industry-led initiatives.