Review of Merchant Card Payment Costs and Surcharging – Phase 3 5. Transparency of Wholesale Fees

5.1 Issues for the Review

Interchange fee schedules have become more complex over time. The number of interchange categories in these schedules has nearly doubled since 2020 and feature inconsistent naming conventions. While different interchange fees can be useful for promoting the use of secure payment methods or the adoption of new technologies, the rationale for such extensive and complex schedules is not clear.

Scheme fees are even less transparent than interchange fees and highly complex (see Chapter 4: Scheme Fees). Full scheme fee schedules are not publicly available and are only provided to participants in the networks. Even sophisticated network participants with access to these documents find them difficult to interpret or use.

Some transparency measures could give rise to risks related to anti-competitive behaviour. As there are only a limited number of designated card networks in Australia, too much information about a competitor’s pricing strategy may result in upward price coordination.

5.2 Options presented in consultation

The RBA consulted on several non-mutually exclusive options to improve wholesale fee transparency.

Option 1: Retain current publication requirements (status quo)

Card networks continue to be required to publish on their website their multilateral interchange fee rates or amounts (whichever is appliable) in Australia.

The RBA continues to publish aggregate payments industry information on issuing and acquiring scheme fees charged by the networks. No data on fees charged by individual card networks are published, since the international card networks have refused to give the RBA permission to publish this information.

Option 2: Require each card network to publish aggregate data on interchange fees

On a quarterly basis, each card network would be required to publish more detailed data on their total interchange fees, transaction values and volumes. The data would provide a breakdown of fees for domestic and international transactions, further divided into debit and credit transactions. Each category would also be split by CP and CNP transactions. Additionally, fees for mobile wallet transactions would be separately listed for domestic and international transactions (see Appendix C: Transparency Requirements). The card networks would be required to provide the RBA with a copy of the data, so that the RBA could republish it on its website.

Option 3: Require each card network to publish aggregate data on scheme fees

On a quarterly basis, each card network would be required to publish data on total gross issuing and acquiring scheme fees, rebates, and transaction values and volumes. The data would be split by domestic and international transactions, further divided into debit and credit transactions. Each category would also be split by CP and CNP transactions. Fees for mobile wallet transactions would be separately listed for domestic and international transactions (see Appendix C: Transparency Requirements). The card networks would be required to provide the RBA with a copy of the data, so that the RBA could republish it on its website.

5.3 Stakeholder views⁵³

Stakeholders were generally supportive of proposals requiring quarterly publication of aggregate wholesale fees. However, some submissions stated that publishing these data would not adequately address the underlying opaqueness of wholesale pricing, arguing that these measures will not meaningfully improve their ability to forecast fees and compare them over time and across networks.

Those stakeholders that supported publishing interchange fee data in the proposed format often cited the overly complex structure and presentation of existing interchange schedules. Many submissions highlighted the opaqueness of interchange fees, strategic rates and volume discounts. While publicly available interchange fee schedules have helped increase transparency, some stakeholders still found that it was difficult to reconcile actual fees charged with the schedules of interchange fees. They stated that the standardised format of the publication requirement could support competition without compromising commercially sensitive information.

Some submissions argued the RBA should require networks to publish more granular splits of interchange fee data and disclosure of strategic interchange rates and volume discounts. Other suggestions to improve the transparency of interchange fees included mandating a reduced number of interchange fees used by each card network and requiring interchange fee information to be provided by card networks in a more user-friendly format.

Many stakeholders, including PSPs and issuers, were supportive of the proposal to require card networks to publish their aggregate scheme fees on a quarterly basis. Stakeholders that supported publishing scheme fee data in the proposed format often cited the limited availability of public data on scheme fees. These stakeholders argued that publishing the aggregate data suggested in the Consultation Paper would be likely to increase public scrutiny on scheme fees, while avoiding commercial sensitivity concerns because of the level of aggregation. However, several submissions that supported the proposal indicated that it would not be enough on its own to resolve the complexity of scheme fees and/or put enough competitive pressure to prevent scheme fees from rising further. One submission suggested to split data by transactional and non-transactional components of scheme fees, and another suggested to limit data published to average fees per-transaction to mitigate risk of upward price coordination.

A few stakeholders, including some card networks, opposed the publication of wholesale fee data and supported continuation of the status quo. They argued that the publication of aggregate quarterly data would be of limited utility as it was unclear how the data could be used to help merchants reduce their card payment costs. Some also argued that the proposed measures would raise commercial sensitivity concerns as the data could be used by other card networks (in Australia or overseas) to reverse engineer scheme fee rates. Further, some card networks argued that it would create an uneven playing field with non-designated networks and other payments industry competitors, as designated card networks would face comparatively greater transparency obligations.

5.4 The PSB’s assessment and conclusions

The RBA will require each designated card network to publish aggregate data on interchange fees and scheme fees on a quarterly basis, in line with the above descriptions of Option 2 and Option 3 (see Appendix C: Transparency Requirements). Making these data publicly available will complement the PSB’s expectation to improve card networks’ scheme fee management and transparency.

The PSB considers that publishing aggregate information will enhance the efficiency and competition of the payments system by allowing card network participants and merchants to more directly compare average fees across networks. Publishing aggregate information on wholesale fees in a manner that facilitates direct comparisons between card networks will allow participants to make better informed decisions that align with their preferences and support efficient outcomes in the payment systems. More information about the level and growth of wholesale fees across networks will also allow merchants to make better informed decisions regarding LCR, as they will be able to better compare the relative costs of the debit card networks.

The PSB considers that the granularity of data specified in the Consultation Paper remains an appropriate balance between the information needs of stakeholders and the commercial sensitivity concerns of the card networks. Publishing data at the card network level will improve the position of acquirers and merchants in negotiations with card networks by reducing information asymmetries regarding major fee categories. Following consultation feedback, the PSB judged that tokenised transactions would be a more appropriate reporting category than mobile wallet transactions and likely to be more robust to future technological changes.⁵⁴ In addition, the decision to include information on CP and CNP transactions, will help acquirers and merchants make informed comparisons based on the transaction types that their businesses receive. There is also substantial overlap between this and the card networks’ current reporting obligations to the RBA, so this requirement will not add significantly to compliance costs.

The PSB did not receive compelling evidence that publishing these data would materially increase the risk of upward price coordination. The PSB assesses that there is no increased risk of upward price coordination of interchange fees because full interchange schedules are already publicly available and fee levels are regulated. The PSB is conscious of the risk of upward price coordination of scheme fees; however, stakeholders that opposed publication have not explained how card networks could derive sensitive information – for example, on individual scheme fees – about their competitors from the aggregate data that will be published.

Greater comparability of scheme fees will enable network participants and merchants to more readily scrutinise scheme fee increases, offsetting the risk of anti-competitive coordination. The RBA will continue to monitor competition between card networks and will consider taking further regulatory action if evidence emerges of anti-competitive behaviour.

The transparency of the wholesale fees charged by non-designated networks and other competitors to designated card networks would be more appropriately considered as part of the next Review planned for mid-2026 following the 2025 amendments to the PSRA.

Endnotes

52 For interchange and acquirer scheme fees, the domestic/international breakdown is by whether cards processed in Australia are domestic-issued or foreign-issued; for issuer scheme fees, the breakdown is by whether the issuer’s cards are acquired in Australia or overseas.

53 For further details, see RBA (2025g).

54 Tokenised contactless CP transactions are a close proxy for mobile wallet transactions. CNP tokenised transactions can include mobile wallet (such as Apple Pay, Google Pay or Samsung Pay), virtual card or Click-to-Pay transactions.