Credit cards fees and EFTPOS remain under RBA regulation
Monday August 31, 2009
The Reserve Bank of Australia has stated that it will continue to regulate all bank fee, credit cards fees and EFTPOS transactions after its Payment System Board ruled that there was lack of competition in the payments market.
The RBA asked the banking industry in September 2008 to improve the current EFTPOS network through the development of a more efficient online payments process but the Payments System Board of the RBA concluded that there was insufficient process made. The PBS was also monitoring the banks ability to offer voluntary undertakings to guarantee that no "interchange fees" would increase to a higher amount.
The PBS did state that banks in Australia have progressed in the right direction, however there was not enough improvement to justify the removal of the RBA as regulating body for fees. As a result of some progress from banks in Australia, there will not be any need for compulsory action from the PBS to make banks reduce the average interchange fees.
"The board has now concluded that, although progress has been made in both of these areas, it is not yet sufficient to warrant a decision to step back from interchange regulation," the RBA said.
Australian Payments Clearing Association chief executive Chris Hamilton addressed the issue in a recent media release from the association and said "We are pleased that the PSB has recognised industry collaborative efforts."
"In line with the PSB's thinking, we believe that such initiatives will exert significant competitive pressures over time. However, today's decision does leave the long-term regulatory framework for consumer payments in Australian hanging, with no clear end date."
"Uncertainty about how and when the regulators will respond makes such collaborative effort that much harder. We will seek greater clarity from the RBA."
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