The Reserve Bank of Australia (RBA) is planning to reduce charges on electronic payments for merchants and consumers.
The move comes at a time when more people switch to contactless payments following the Covid-19 pandemic.
Go deeper with GlobalData
RBA assistant governor Michele Bullock said that the central bank may use its regulatory powers to reduce the cost of e-payments, reported Reuters.
She added that ATM withdrawals plummeted 30% in April compared to the figures of March. The number of ATM transactions has also dropped more than 40% from the figures registered a year ago, indicating a shift to contactless payments.
However, the switch has increased costs for some merchants as debit card payments are automatically routed through the international schemes. Accordingly, it is important that merchants receive access to least-cost routing.
In a speech titled Panic, Pandemic and Payment Preferences, Bullock said: “So far, the Bank has not mandated that acquirers explicitly offer least-cost routing to all their merchants.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“But it remains an option that will be considered in the Review. In the meantime, we are talking with merchants to understand their experience with payment costs through this period.
“We will also be considering how transparency of the cost of the payment plans offered to merchants could be improved.
“Ultimately though, if market forces are not generating competition to lower the cost of debit card payments, we may need to consider lowering the benchmarks that serve as a cap on average interchange fees.”
Meanwhile, the number of Covid-19 cases in Australia increased to 7,240.
