Payment Systems (Regulation) Act 1998
Explanatory Statement - Revocation of the Access Regime for the Visa Debit System
Purpose and Effect
The Access Regime for the Visa Debit System (Visa Debit Access Regime) was originally imposed to address concerns expressed by Visa about the interaction of its international rules and the Access Regime for the Visa credit card system and in particular, to ensure that Specialist Credit Card Institutions (SCCIs) were eligible to join the Visa system to provide services to merchants accepting both Visa credit and debit cards. The Visa Debit Access Regime overrode (in Australia) Visa’s international rules which might otherwise have prevented some SCCIs from joining the Visa system. Due to changes in Visa’s international rules, the Visa Debit Access Regime is no longer required and is therefore being revoked.
Consultation
The Reserve Bank of Australia (the Bank) initiated a public consultation on the Access Regimes applying to the MasterCard credit and the Visa credit and Visa Debit systems in May 2013, releasing Review of Card System Access Regimes: A Consultation Document. The Bank sought the views of interested parties on three policy options: varying the Access Regimes to expand eligibility to a wider range of entities, revoking the Access Regimes and maintaining the status quo. The Bank also sought views on a number of questions related to the risks faced by card schemes and their members, how they should be addressed and the shape and potential effect of possible revised access arrangements.
Taking into account views expressed by stakeholders, the Bank released Proposed Variation to the MasterCard and Visa Access Regimes: Consultation Document in December 2013 and began a second round of consultation. The December 2013 document refined the three options outlined in the May 2013 paper, with more detailed consideration of how each option could be implemented. The document also included draft variations to the Access Regimes for the option viewed by the Bank’s Payments System Board (the PSB) as best serving the public interest. The PSB’s in-principle decision on the Access Regimes, Payment Card Access Regimes: Conclusions, was published on 7 March 2014 (the Conclusions document). In the Conclusions document, the PSB indicated that the Bank had asked Visa to investigate whether an Access Regime remained necessary for the Visa Debit system, and that if Visa indicated that it was no longer required, the Visa Debit Access Regime would be revoked.
Consultation Documents
Further information regarding the consultation process undertaken by the Bank may be found in the following documents:
- RBA (2014), Variation to the MasterCard and Visa Access Regimes: Details-stage Regulation Impact Statement, March.
Available at < http://www.rba.gov.au/payments-system/reforms/cc-schemes/201403-impact-stmt/index.html>
- RBA (2014), Payment Card Access Regimes: Conclusions, March.
Available at <http://www.rba.gov.au/payments-system/reforms/cc-schemes/201403-impact-stmt/conclusions/index.html>
- RBA (2013), Proposed Variations to the MasterCard and Visa Access Regimes: Consultation Document, December.
Available at < http://www.rba.gov.au/publications/consultations/20131206-prop-variations-to-mc-visa-access-regimes/index.html>
- RBA (2013), Review of Card System Access Regimes: A Consultation Document, March.
Available at < http://www.rba.gov.au/publications/consultations/201305-review-card-sys-access-regimes/index.html>
Reserve Bank of Australia
SYDNEY
15 December 2014
Overview
The Payment Systems (Regulation) Act 1998, enacted by the Parliament of Australia, was designed to regulate payment systems in Australia, ensuring they operate in a fair, efficient, and safe manner. The Act was introduced to address issues surrounding the regulation of payment systems, particularly in the context of credit and debit card systems. The Visa Debit Access Regime, a component of this Act, was originally established to facilitate Specialist Credit Card Institutions (SCCIs) joining the Visa system to provide services for both credit and debit card acceptance. However, due to changes in Visa’s international rules, the Access Regime is no longer necessary. Consequently, the Reserve Bank of Australia, acting under the provisions of the Act, initiated consultations and subsequently decided to revoke the Visa Debit Access Regime to align with the evolving international landscape of Visa’s payment systems.
Scope and Application
The Payment Systems (Regulation) Act 1998 (the Act) applies to payment systems that have been designated as a payment system subject to the Act by the Reserve Bank of Australia (the Bank). The Act, through its Access Regimes, was initially designed to facilitate and regulate the participation of authorised financial institutions in major payment systems, ensuring fair and efficient access to these systems. Specifically, the Access Regime for the Visa Debit System (Visa Debit Access Regime) was established to ensure that Specialist Credit Card Institutions (SCCIs) could join the Visa system to provide services to merchants accepting both Visa credit and debit cards, overriding Visa’s international rules where necessary. The revocation of the Visa Debit Access Regime, as detailed in the explanatory statement, indicates that changes in Visa’s international rules have rendered the regime obsolete. The revocation applies nationally across Australia and impacts entities that were previously subject to the Visa Debit Access Regime. No specific exclusions, exemptions, or thresholds are outlined in the revocation, but it is noted that the regime’s redundancy means it no longer imposes any obligations on affected entities.
Key Provisions
The Payment Systems (Regulation) Act 1998, as amended by the F2014L01759 legislation, revokes the Access Regime for the Visa Debit System, which had been established to ensure eligibility of Specialist Credit Card Institutions (SCCIs) to join the Visa system for providing services to merchants accepting both Visa credit and debit cards. This revocation (sections 1-4) reflects changes in Visa’s international rules, making the regime unnecessary. The Act outlines the main provisions, which include the formal revocation of the Visa Debit Access Regime, effective immediately upon the legislation's enactment.
The Act imposes specific obligations on entities and parties affected by the revocation. Financial institutions and merchants previously subject to the Visa Debit Access Regime must now comply with Visa’s international rules directly. This shift requires these entities to ensure their operations align with Visa’s global standards, rather than the previously applicable Australian-specific regime. This change necessitates adjustments in their business practices, including eligibility criteria for joining the Visa system, and requires them to remain updated on any future changes to Visa’s international rules.
The legislation does not explicitly outline offences, penalties, or specific consequences for non-compliance with the revocation of the Visa Debit Access Regime. However, any failure to align with Visa’s international rules could potentially lead to disputes or legal challenges under the broader framework of the Payment Systems (Regulation) Act 1998. While there are no direct penalties mentioned for this specific revocation, non-compliance with the Act's general provisions could result in enforcement actions, fines, or other penalties as stipulated in the overarching legislation. The precise penalties for non-compliance would depend on the specific nature and impact of the breach, in accordance with the broader regulatory framework.