MAG Insights

Announcements from the MAG & Featured Articles

Reserve Bank of Australia Releases Draft Payment Card System Changes (MAG Quarterly- Volume Four, Issue One)

In late 2015, the Reserve Bank of Australia (RBA) published draft payment card system changes. The RBA began their review of existing interchange fee and card acceptance reforms in March of 2015. The new draft standards were open for comment until early February, and final changes are anticipated for release in May 2016.

The primary changes are to the interchange fee levels and surcharging parameters for merchants. Under the proposed standards:

  • Merchants will be able to recoup ALL costs of card acceptance, not just interchange fees, through surcharges.
  • Merchants will be provided with more transparency about the payment cost associated with each payment method. This information will be disclosed as a percentage on the merchant’s monthly account statement.
  • The weighted average interchange fee benchmark for debit cards will be reduced from 12 to 8 cents.
  • Debit interchange fees will be capped at the greater of 15 cents or 0.20% of the transaction value.
  • Credit card interchange fees will remain at the current weighted average benchmark of 0.50%.
  • Credit card interchange fees on an individual card or transaction will be capped at 0.80% eliminating high rates on premium cards.
  • All transactions at Australian merchants will be covered by the regulations, including transactions on foreign-issued cards.

More details are available at: http://www.rba.gov.au/media-releases/2015/mr-15-24.html