Sydney, 11 September, 2007: The Australian Bankers’ Association (ABA) has welcomed the Australian Payments Clearing Association (APCA) release of its consultation document regarding portability of debit and credit instructions.
The APCA has today released a Payments Industry Consultation Paper on Aspects of Account Switching1 and has invited community feedback on whether there is a case to change the arrangements regarding debit and credit standing instructions with respect to making these instructions easier to transfer.
Some banks already have online tools which make it easier to switch bank accounts by generating letters notifying businesses and employers of a changed bank account. Competition for customers has driven this innovation.
The APCA consultation document examines international practice in this area and has found that the way direct debit instructions are managed in Australia is different to other countries in that merchants can initiate and retain a customer’s debit/credit authorisation without notifying the customer’s banks of the details.
This is atypical compared to most countries surveyed. Prior to March 2000, the system in Australia was similar to other countries, but in order to improve the customer use of direct debits/credits, merchants were given the authority to hold these debit and credit instructions.
If the results of the public consultation indicate changes may improve the current system, the ABA will work with merchants to ensure any changes do not reduce existing security standards, increase compliance costs or undermine consumer popularity.
The ABA welcomes consumer and merchant feedback on this consultation paper.
For further information:
Heather Wellard
ABA PR
Phone: 02 8298 0411
Mobile: 0409 830 439