ACCC DRAFT DETERMINATION ON EFTPOS REFORM

Sydney, 8 August, 2003:  The Australian Competition and Consumer Commission (ACCC) has today proposed to deny the application to reduce EFTPOS interchange fees to zero.  The Australian Bankers’ Association (ABA) described the draft determination on EFTPOS reform by the ACCC as surprising. The application to set the interchange fee to zero by banks, building societies and credit unions[1] was modelled to address the concerns articulated in the Joint Study published by the ACCC and Reserve Bank of Australia (RBA).    “The study believes that the debit card network in Australia does not need an interchange fee…” (ACCC & RBA Joint Study, p 69,October 2000)   The ABA is disappointed that the ACCC has today proposed to deny the opportunity for downward pressure on consumer transaction banking fees, while this reform was previously advocated by the ACCC in its Joint Study with the RBA.   The ACCC believes that the issue of “access” to EFTPOS networks needs to be addressed as part of the interchange fee reform.  This is a separate issue, and as the ACCC is fully aware this work is already underway.  A commitment to a thorough investigation of access has been undertaken with diligence by the Australian Payments Clearing Association (APCA), an association the RBA has publicly approved as the appropriate body within the payments system to address such issues.   The ABA is also disappointed  that the ACCC has described the subject matter of the applications as a “price fix”, as not only does the ACCC omit to mention that the interchange fee proposed is a zero fee, it also fails to explain that both it and the RBA had advocated an industry agreement.   For further information:   Heather Wellard                       ABA Public Relations Phone: 02 8298 0411 Mobile: 0409 830 439        ENDS   [1] The parties to the proposed reform are: Australia and New Zealand Banking Group Limited, Australian Settlements Limited, Bank of Queensland Limited, Bank of Western Australia Limited, Bendigo Bank Limited, Cashcard Australia Limited, Commonwealth Bank of Australia, Credit Union Services Corporation (Australia) Limited, National Australia Bank Limited, St George Bank Limited, Suncorp-Metway Limited and Westpac Banking Corporation.