SYDNEY- Australia's Reserve Bank has designated the country's EFTPOS debit card system as a payment system under the Payment Systems (Regulation) Act 1998.
According to a Reserve Bank news release, designation is the first step in the possible establishment of standards and/or an access regime for a payment system.
This designation follows the designation of the Visa Debit payment system in February.
According to the Reserve Bank release, the Reserve Bank concluded that current interchange arrangements are not conducive to the efficiency of the overall payments system, and will now consider setting standards for interchange fees for both the EFTPOS debit card and the Visa Debit payment systems. The objective is to improve the efficiency of Australia's payments system and lower costs for consumers.
According to an article in The Age, an earlier attempt to reform debit card fees without intervention failed when the Australian Competition Tribunal overturned an Australian Competition and Consumer Commission decision to authorize an agreement between banks, credit unions and building societies to cut the interchange fee to zero.
The Reserve Bank designated credit cards in 2002, despite protests from large banks, according to the Age article. The result: the cost of credit card transactions was slashed by about a third, stripping nearly $450 million a year of income from the banks.
The Reserve Bank has opted not to designate the ATM system at this time, according to the release. It based its decision on the "desire of many participants in the ATM industry to pursue voluntary reform, with a view to increasing competition in the charges cardholders pay when using so-called 'foreign' ATMs."
