central bank, the Reserve Bank of Australia (RBA), has announced
that it is to review the country’s credit and debit card systems in
mid-2007, and any changes that result from the review will be in
effect by the end of 2008. The review will encompass the RBA’s
changes to the credit card system since 2002, as well as changes
made in April 2006 to the electronic funds transfer at point of
sale (EFTPOS) system.

The review will include reforms to the debit card systems, as well
as interchange fees and access arrangements in other payment
systems, which the RBA said reflected its efforts to improve the
efficiency of the overall payments system. The review will examine
the development of the payments system over recent years and the
implications for competition and efficiency, and assess whether the
various standards and access regimes remain appropriate.

The RBA will conduct a study of the resource costs involved in
different methods of payment, including cash. This study will
update and extend the results published in the RBA Joint Study
released in October 2000, which dealt only with the cost to
financial institutions of debit and credit card payments. A second
study will examine how various payment methods are used in
different circumstances, including the potential for
substitutability between various forms of payment.

The review will commence in mid-2007 when the RBA will release a
paper setting out what it sees as the key issues. This paper will
form the basis for the first round of consultations with interested
parties, and the RBA anticipates releasing the preliminary
conclusions of the review in the first half of 2008, and then
consulting with industry participants on the conclusions. Any
specific proposed changes to the current standards and access
regimes would be considered at the end of this process, and any
changes would again be subject to another round of consultation.
The RBA expects to complete the entire review process, including
any changes to the current standards and access regimes, by late

However, Visa and MasterCard have called for an independent body to
conduct the review. Both companies say that the RBA’s decision to
review its own credit and debit card regulations is unbalanced, and
that the RBA would not be critical enough of its own reforms and

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