Levelling the field for card transactions

The majority of Australian businesses want a level playing field for payment regulations, according to a survey commissioned by MasterCard.

The majority of Australian businesses want a level playing field for payment regulations, according to a survey commissioned by MasterCard.

Conducted by Ipsos Public Affairs and involving 300 managers and owner/proprietors from a selection of business sectors across all Australian states and territories, the survey found that 94 per cent of businesses believe that all payment systems should be regulated in the same manner.

 

The survey also found that the two-tier system, which excludes some services from interchange fee regulation, was a surprise to the majority of merchants. Only two out of five respondents were aware that the American Express and Diners’ sit outside the regulation regime, which has been in place for more than a decade.

 

This has led to merchants being charged on average twice as much to accept American Express transactions. Data from the Reserve Bank of Australia shows the average cost of acceptance for MasterCard/Visa is 0.84 per cent, compared to 1.73 per cent for American Express and 2.11 per cent for Diners.

 

“Australian businesses know that some types of cards cost more to accept than others, but many of them don’t know why,” said Brent Thomas, Vice-President, Corporate Affairs & Public Policy, MasterCard Australia. “It’s hard to explain to anyone why different rules and charges apply to different payment companies. It simply doesn’t make sense in today’s business landscape.”

 

MasterCard is calling on the Australian government to create a level playing field for all payments when it responds to Financial System Inquiry (FSI) later this year. David Murray’s final report, released in December, argues that there should be ‘competitive neutrality’ between system providers.

 

“For regulation to work effectively, it needs to apply to all parties equally,” Thomas said. ““The FSI provides an ideal opportunity to address this imbalance, and create a level playing for all payment systems.”

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