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MERCHANTS SHOULD ENSURE THEY PASS ON TO CONSUMERS
THE $500M IN SAVINGS FROM CREDIT CARD REFORM
Sydney, 20 May, 2005: The Australian Bankers’ Association (ABA) says that increased credit card fee revenue was the well foreshadowed consequence of the Reserve Bank’s credit card reforms which nearly halved the interchange fee.
The upside of credit card reform is that merchants are better off by $500m per year. If merchants pass this $500m on through lower prices to consumers, consumers overall will be more than compensated for higher credit card costs.
This is how it was meant to happen. Merchants should ensure it does.
Support for Reserve Bank Credit Card Reforms
The Australian Consumers’ Association: “The sooner these (credit card) reforms are implemented, the sooner other inefficiencies and flaws in the Australian payments system can be addressed, to the benefit of all participants, and consumers in particular.”1
Financial Services Consumer Policy Centre: “The Financial Services Consumer Policy Centre fully supports all three core proposed reforms, with some minor suggested improvements…”2
The Sydney Morning Herald – Editorial: “Credit card reform…is well overdue…The Reserve Bank’s interest in efficiency may not be primarily consumer orientated. But if its new measures work, credit card users will undoubtedly benefit.”3
The Australian Competition and Consumer Commission (ACCC): “The Australian Competition and Consumer Commission welcomes the Reserve Bank of Australia’s credit card reforms…Increased competition and efficiency will be to the benefit of both Australian businesses and consumers.”4
For further information:
Heather Wellard
Director, ABA Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439
ENDS
1 Catherine Wolthuizen, Senior Policy Officer, Financial Services. Australian Consumers’ Association, ‘Response to the Reserve Bank of Australia’s Draft Standards And Access Regime for Credit Card Schemes’, 15 March 2002.
2 Chris Connolly and Khaldoun Hajaj, Financial Services Consumer Policy Centre, ‘Response to: Reserve Bank of Australia Reform of Credit Card Schemes in Australia’, March 2002.
3 Sydney Morning Herald Editorial, ‘Now, competition on the cards’, Thursday 29 August, 2002.
4 ACCC, ‘ACCC welcomes Reserve Bank credit card reforms’, media release, 27 August 2002.
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