Payment Systems (Regulation) Act 1998 - Interchange Fees in the EFTPOS System (November 2012) (Cth)

Payment Systems (Regulation) Act 1998

Interchange Fees in the EFTPOS System This notice is published in accordance with the requirements set out in Section 29(2)(a) of the Payment Systems (Regulation) Act 1998 (the Act). The Reserve Bank of Australia determines, in accordance with Section 18 of the Act, the Standard Interchange Fees in the EFTPOS System to be complied with by participants in the payment system operated within Australia known as the EFTPOS system, which was designated as a payment system on 12 June 2012 in Designation No 1 of 2012. The Standard will commence on 1 July 2013.

Purpose and effect of the Standard The purpose of the Standard is to promote competition and efficiency in the Australian payments system by ensuring that interchange fees in the EFTPOS system can be set within similar regulatory constraints to the other debit card systems. The Standard requires that bilateral interchange fees and the weighted average of multilateral interchange fees in the EFTPOS system be subject to the same cap that applies to the Visa Debit system – currently 12 cent paid to the issuer. The Standard is determined concurrently with the revocation of the previous Standard, The Setting of Interchange Fees in the EFTPOS System, as applied to the EFTPOS system designated in Designation No 2 of 2004. The practical effect is to remove the requirement under the previous Standard that bilateral interchange fees in the EFTPOS system be between 4 and 5 cents, paid to the acquirer, and to replace it with a requirement that bilateral fees not exceed the benchmark set for the Visa Debit system – currently 12 cents paid to the issuer. The weighted average of multilateral interchange fees in the EFTPOS system is also capped at the Visa Debit benchmark, as it was under the previous Standard. In addition, the Standard requires transparency of EFTPOS interchange fees and introduces a requirement for ePAL to certify annually to the Reserve Bank that it has complied with the Standard. These changes are expected to promote competition between debit card systems in Australia and the development of a more efficient payments system.