Australian merchants will incur no interchange
fees on transactions under AUD15 ($15) under a new multilateral
interchange fee model.

The Australian debit processing
network EFTPOS Payments Australia Limited (EPAL) has
announced the new model, which will replace the
current system of bilateral interchange fees agreed between
different participants in the network.

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From 1 October 2011, fees for
transactions on the network are to be set at 5 Australian cents for
POS transactions of AUD15 ($15) or more. Fees are set to be zero on
transactions for charities, Medicare Easyclaim (the Government
health insurance programme), and transactions under AUD15.

EPAL has said the new fee model follows
extensive consultation with banks and retailers and will support
investment into making the network more secure and accessible for
both retailers and consumers.

“The new 5 cent interchange fee for standard
POS transactions is less than half the equivalent fee of 12 cents
payable for international scheme debit cards [Visa and
MasterCard],” said EPAL managing director Bruce Mansfield.

“Our new multi-lateral interchange fees should
be considered alongside the separate scheme fees that apply to both
EFTPOS and international scheme debit cards. When the significantly
cheaper EFTPOS scheme fee is factored in, EFTPOS transaction
charges will be three to four times cheaper for retailers than
international debit card transactions.”

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The zero interchange fee for low-value
transactions is intended to provide an incentive for more
retailers to accept small payments on EFTPOS.

“Today, approximately 25% of EFTPOS
transactions are below $20,” said Mansfield. “In New Zealand this
is figure is as high as 50%, so there is a considerable opportunity
to convert more cash transactions to EFTPOS in Australia.”

The introduction of a new EFTPOS interchange
fee model follows a decision by the Reserve Bank of Australia in
November 2009 to recognise multi-lateral EFTPOS interchange fees
and to align the EFTPOS multi-lateral interchange fee standard with
those for international scheme debit card interchange fees.