RESERVE BANK OF AUSTRALIA

Payment Systems (Regulation) Act 1998

EXPLANATORY STATEMENT:  ACCESS REGIME FOR the DESIGNATED EFTPOS SYSTEM

Background

The Reserve Bank has been examining interchange fees and access arrangements for Australia's debit card systems for a number of years. The early findings from this work were published by the Bank and the ACCC in Debit and credit card schemes in Australia: A study of interchange fees and access (the Joint Study) in October 2000.

In April 2006, the Reserve Bank released a package of reforms to Australia's debit card systems. The package of reforms included an Access Regime for the EFTPOS System. The Access Regime is the result of co-operative work between the Bank and the Australian Payments Clearing Association (APCA) over a number of years. Together with the EFTPOS Access Code developed by APCA, it will significantly improve access arrangements to Australia’s EFTPOS system.

Purpose and Operation

The objective of the Reserve Bank's Access Regime for the EFTPOS system is to improve arrangements for new participants to gain access to Australia’s EFTPOS system. The Regime will promote competition in the provision of EFTPOS payment services and increase efficiency in both the EFTPOS system and Australia’s payments system as a whole.

The Access Regime sets a cap on the price that an existing participant can charge to establish a new connection and sets out provisions that will help ensure that negotiations over interchange fees are not used to frustrate entry.

Other important aspects of entry are covered in APCA's Access Code. These include providing new and existing participants with the right to establish direct connections with participants in the EFTPOS system and setting a time frame under which connections must be established. The Access Code has been adopted by the eight institutions that are the members of EFTPOS Access Australia and has been published on APCA’s website.

Consultation

The Access Regime is the result of co-operative work between the Bank and APCA (the relevant industry body) over a number of years. During this process, the Bank consulted with current participants in the system and potential new entrants.

The rationale for the reform package is discussed in the Bank's Media Release Reform of Debit Card Systems in Australia, 7 July 2006 and the accompanying Regulation Impact Statement. Both documents are publicly available.

The Regulation Impact Statement also sets out in detail the extensive consultation undertaken by the Bank. It summarises the various arguments made during the consultation process and the Bank's reasoning in coming to its final decisions.

Documents

• RBA Media Release: Reform of Debit Card Systems in Australia, 7 July 2006, is available on the Reserve Bank’s website at http://www.rba.gov.au/MediaReleases/2006/mr_06_02.html
• The Regulation Impact Statement detailing these changes is available on the Reserve Bank’s website at http://www.rba.gov.au/PaymentsSystem/Reforms/DebitCardSystemsAus/ImpactStatementApr2006/impact_statement_0406.pdf;
• All documents can be obtained by contacting the Manager, Media Office, Information Department, Reserve Bank of Australia, 65 Martin Place, Sydney NSW 2000 SYDNEY. (telephone) 02 9551 9720 or (fax) 02 9221 5528.
• The Access Code developed by APCA is available on the APCA website at www.eftposaccess.com.au.