Eftpos Australia has applauded a move by the RBA Payments System Board, which has raised concerns about multi-network debit cards, and is calling for a voluntary agreement on the issue.
Multi-network debit cards are issued by banks and other financial institutions for ATM usage, and with debit functionality from more than one payments network.
In the past, the Payments System Board has indicated its support for the practice, on the basis the cards are convenient for cardholders and allow stronger competition between networks and the point of sale.
But the board has raised a number of concerns about these cards, including scheme rules that require the provision of commercially sensitive data about one network to a competitor network.
Other concerns include the imposition of fees by one network on another network’s transactions, and disputes over the placement of network brands on cards.
“Since then, further issues have arisen between the various networks in the context of contactless debit cards,” the board said in a statement.
“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.
It’s claimed that small businesses are negatively affected by this trend because they have to pay more to process credit transactions instead of Eftpos transactions.
Eftpos argues Visa and Mastercard are blocking it from using its own branding on these cards, and thus dissuading shoppers from using different payment options.
As such, the Payments System Board has discussed various courses of action that could be taken.
“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,” it 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.”
The board said it has asked staff to meet with the parties involved to see if a voluntary agreement can be reached – a move welcomed by Eftpos Australia.
“Eftpos welcomes the announcement by the RBA regarding multi-network debit cards,” Eftpos managing director Bruce Mansfield said in a statement.
“We are very happy to embrace a voluntary agreement. We have been seeking this for some time.”
If an acceptable outcome cannot be reached in an “expeditious manner”, the board has authorised a public consultation on the case for regulatory action.