The RBA Payments Board has provided support for a claim made by Eftpos Australia that credit card providers Visa and Mastercard could be engaging in anti-competitive behaviour.
It has called for a public consultation on the matter, and has requested all the parties involved work together to come up with a voluntary agreement.
This is just the latest tussle involving payment methods and card providers. The subject of transaction interchange fees became a controversial topic late last year when a new system was implemented.
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In its new statement, the board said it had discussed issues relating to cards several times, and that it has concerns regarding rules that require “the imposition of fees by one network on another network’s transactions”.
“Since then, further issues have arisen between the various networks in the context of contactless debit cards. These developments have the potential, in the Board’s view, to inhibit competition, limit choice to consumers, and increase costs.”
The issue is that customers using debit cards can access different types of accounts using the “savings”, “credit” or “cheque” buttons on an Eftpos terminal. This is important, because when a shopper presses “credit” on the terminal, the payment is processed through Mastercard or Visa.
This also becomes a bigger problem when contactless payments are taken into account, because these companies have made the “credit” option the default for options like PayWave.
Small businesses are negatively affected by this trend, because they have to pay more to process credit transactions instead of Eftpos transactions.
Eftpos argues credit card giants Visa and Mastercard are blocking it from using its own branding on these cards, and thus dissuading shoppers from using different payment options.
“The Board has discussed the various courses of action that could be available. It notes that there is significant interest among system participants for some ‘rules of the game’ where two networks are seeking access to an issuer’s card,” the board said.
“It also notes that authorities in other jurisdictions have taken actions that are aimed at helping to ensure that the costs involved in debit card transactions are held down.”
Eftpos managing director Bruce Mansfield said in a statement this morning the organisation welcomes the announcement.
“We are very happy to embrace a voluntary agremeent. We have been seeking this for some time.”
However, he told The Australian Financial Review it was unfair its competitors have attempted to dissuade cards from carrying the Eftpos branding.
“Our competitors have done all they can to get our branding off the card, which is a little bit unfair.
“They’re trying to relegate our brand to the back of the card, or not on the card at all, so there’s no visual prompting there [to go through Eftpos].”
Mansfield added Eftpos is looking for “a level playing field”.
The RBA has subsequently said it wants to set up “rules” for when two competing networks want access to the one card