The Reserve Bank will push ahead with a new raft of changes to debit and credit card interchange fees that could save merchants and consumers billions of dollars.
In a win for retailers, the RBA has proposed changes that would allow merchants to make independent decisions about the credit and debit cards they accept. These changes would allow merchants to reject cards that attract higher interchange fees, potentially saving them millions of dollars each year.
The RBA also wants card providers such as Mastercard and Visa to slash the interchange fees charge on credit card transactions from 0.5% to 0.3% of each transaction. It has also proposed changes that would cut the interchange fees on Visa and Mastercard’s branded debit cards from 12c to 5c, bringing the debit card interchange fees in line with the interchange fees charged on Eftpos transactions.
Eftpos card issuers will also be given financial incentives to promote the Eftpos scheme, which is cheaper for consumers to use than Visa and Mastercard’s debit card schemes. The RBA is concerned that without changes to the Eftpos scheme “there is a significant risk that, in the longer term, the current system will not be able to compete effectively with the international card schemes”.
Mastercard has expressed its disappointment with the proposed changes, saying they will add to confusion amongst consumers and merchants.