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Connexus : Issue 40
The Reser ve Bank is expected to decide in July the way forward in its regulatory oversight of Eftpos, Australia's domestic debit card scheme. Also on the RBA's agenda is a greater role in directing infrastructure developments in the payments system. RBA Governor Glenn Stevens said recently that “innovation in the customer- facing technology is moving at a pace much greater than the underlying infrastructure". “No matter how much time, effort and money a fnancial institution puts into its own systems and the ways in which customers interface with those systems, the payments ser vice it can provide is only as good as the arrangements that allow payments to pass between institutions," Stevens said. "These arrangements are in the cooperative space [but] cooperative decision-making between competitors is notoriously diffcult.” The Gover nor fagged a move on governance ar rangements in the payments industry to improve collective decision-making. The RBA's oversight of Eftpos, set up in 2004, is now looking dated with the development and evolution of EFTPOS Payments Australia Limited (EPAL) and its rules and membership. Given EPAL's move to a common multilateral interchange fee schedule in October 2011, the RBA sought industry views as to whether the original "designation" of Eftpos remains relevant. The RBA's discussion paper fagged two options regarding the defnition of the Eftpos system to be adopted in a new designation should it be required to support future regulation of the system. Under the frst option, the designation would rely on a defnition of the Eftpos system based on EPAL's rules and membership. The second option is to adopt a broader defnition of the Eftpos system that lies outside the scope of EPAL r ules and membership. Submissions to the RBA were divided between the two options. Transparency and competition vital Abacus supports ongoing designation of the Eftpos system based on EPAL rules and membership. "We believe this approach best ser ves the public interest until a fnal decision is made on the future of the broader framework of the Eftpos system," says CEO Louise Petschler. "The introduction of a common multilateral interchange fee schedule for the Eftpos system provides transparency and promotes competition in the payment system," she says. "It is disappointing that, three years after EPAL was established, bilateral interchange arrangements persist. "Large retailers, such as Woolworths, continue to beneft from bilateral Eftpos interchange fee arrangements. This continuing faw in the system disadvantages small card issuers compared with large banks, and disadvantages all small retailers against the two biggest retail companies," Petschler says. Luke Lawler is senior manager – public afairs at Abacus. New payments rules are imminent Eftpos and payments infrastructure are in the RBA's sights. BY LUKE LAWLER Innovation in the customer- facing technology is moving at a pace much greater than the underlying infrastructure. Glenn Stevens, Governor, RBA NEWS www.abacus.org.au 9