{"id":"F2007L01288","name":"Payment Systems (Regulation) Act 1998 - The Setting of Interchange Fees in the Visa Debit Payment System, the ‘Honour All Cards’ Rule in the Visa Debit and Visa Credit Card Systems and the ‘No Surcharge’ Rule in the Visa Debit System","slug":"payment-systems-regulation-act-1998-the-setting-of-interchange-fees-in-the-visa-debit-payment-system","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":65458,"registerId":"commonwealth-F2007L01288-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"The Setting of Interchange Fees in the V","sectionType":"part","heading":"The Setting of Interchange Fees in the Visa Debit Payment System","content":"![](image.001.png)\n\nThe Setting of Interchange Fees in the Visa Debit Payment System\n\nas amended\n\nmade under section 18 of the\n\nPayment Systems (Regulation) Act 1998\n\nCompilation Date: 1 September 2016  \nCompilation Number: 3\n\nThis compilation was prepared on 1 September 2016  \ntaking into account amendments up to Revocation of the Standard the ‘Honour All Cards’ Rule in the Visa Debit and Visa Credit Card Systems and the ‘No Surcharge’ Rule in the Visa Debit System registered on 1 September 2016.\n\nPrepared by the Reserve Bank of Australia\n\n  \n\nStandard\n\n## The Setting of Interchange Fees in the Visa Debit Payment System\n\n### Objective\n\nThe objective of this Standard is to ensure that the setting of interchange fees in the designated Visa Debit payment system promotes:\n\n(i) efficiency; and\n\n(ii) competition\n\nin the Australian payments system.\n\n### Application\n\n    This Standard is determined under Section 18 of the Payment Systems (Regulation) Act 1998.\n    This Standard applies to the payment system operated within Australia known as Visa Debit, which was designated as a payment system on 23 February 2004.\n    In this Standard:\n\n    an ‘acquirer’ is a participant in the Visa Debit system in Australia that provides services to a merchant to allow that merchant to accept a Visa Debit card;\n    ‘credit card transaction’ has the same meaning as in the Standard The Setting of Wholesale (‘Interchange’) Fees in the Designated Credit Card Schemes;\n    ‘financial year’ is the 12-month period ending 30 June;\n    an ‘issuer’ is a participant in the Visa Debit system in Australia that issues Visa Debit cards to its customers;\n    ‘merchant’ means a merchant in Australia that accepts a Visa Debit card for payment for goods or services;\n    ‘reference year’ is the financial year prior to the relevant year;\n    ‘relevant year’ is the financial year in which the benchmark must be calculated;\n    ‘Visa Debit card’ means a card issued by a participant in the Visa Debit payment system, under the rules of the Scheme, that allows the cardholder to make payments to merchants for goods or services by accessing a deposit account held at an authorised deposit-taking institution;\n    ‘Visa Debit card transaction’ means a transaction in Australia between a Visa Debit cardholder and a merchant involving the purchase of goods or services using a Visa Debit card (net of credits, reversals and chargebacks);\n    terms defined in the Payment Systems (Regulation) Act 1998 have the same meaning in this Standard.\n    4. This Standard refers to wholesale fees, known as ‘interchange’ fees, which are payable between an issuer and an acquirer, directly or indirectly, in relation to a Visa Debit card transaction.\n    5. Each participant in the Visa Debit system must do all things necessary on its part to ensure compliance with this Standard.\n    6. If any part of this Standard is invalid, the Standard is ineffective only to the extent of such part without invalidating the remaining parts of this Standard.\n    7. This Standard is to be interpreted:\n\n    in accordance with its objective; and\n    by looking beyond form to substance.\n\n    8. This Standard comes into force on the date on which it is published in the Gazette.\n\n### Information\n\n    9. The administrator of the Visa Debit system must provide to the Reserve Bank of Australia data on the number and value of Visa Debit card transactions in Australia in the reference year, if such data are available. In the event that such data are unavailable, the administrator must provide information on the number and value of Visa Debit card transactions in Australia that were processed by the Visa system in the reference year.\n\n### Interchange Fees\n\n    10. From 1 November 2006, on each of the dates specified in paragraph 11, the weighted average of interchange fees implemented in the Visa Debit system in Australia must not exceed the benchmark calculated in accordance with paragraphs 13 and 14 below.\n    11. For the purposes of paragraph 10, the dates are:\n    (i) 1 November 2006 and 1 November of each third year thereafter; and\n    (ii) the date any interchange fee is introduced, varied or removed in the Visa Debit system.\n    12. For the purposes of paragraph 10, the weighted average of interchange fees is to be expressed as a number of cents per transaction. It is to be calculated by dividing the total interchange revenue that would have been payable had the interchange fees implemented on the dates specified in paragraph 11 been applicable in the previous financial year, by the number of transactions in that year.\n\n### Methodology\n\n    13. The benchmark is to be calculated by the Reserve Bank of Australia using data for the reference year supplied by the credit card schemes designated by the Reserve Bank of Australia and to which the Standard The Setting of Wholesale (‘Interchange’) Fees in the Designated Credit Card Schemes applies.\n    14. The benchmark is to be calculated as follows:\n    (a) A cost base will be calculated for each designated credit card scheme by dividing the costs of processing and authorisation described in paragraphs 13(i) and 13(iii) of the Standard The Setting of Wholesale (‘Interchange’) Fees in the Designated Credit Card Schemes in the reference year by the total value of credit card transactions in the reference year.\n    (b) A weighted average of the cost bases in the designated credit card schemes will be calculated. The weights to be used are the shares of the value of credit card transactions of each designated credit card scheme in the value of total credit card transactions in the designated credit card schemes in the reference year.\n    (c) This weighted average will be multiplied by the average value of all scheme debit transactions (both MasterCard and Visa) in the reference year, calculated using the data provided to the Reserve Bank of Australia in accordance with paragraph 9, to yield a benchmark expressed as a number of cents per transaction.\n    15. The Reserve Bank of Australia will calculate the benchmark by 30 September of the relevant year and publish it on its website.\n\n### Initial and subsequent benchmarks\n\n    16. For the initial benchmark the relevant financial year is 2006/07.\n    17. The benchmark is to be re-calculated in the financial year 2009/10 and every three years thereafter.\n    18. The Reserve Bank of Australia may at any time, by notification on its website, waive or suspend the requirement to re-calculate the benchmark, in which case the benchmark in force at that time will continue to apply.\n\n### Transparency\n\n    19. The administrator of the Visa Debit system must publish the interchange fees applying to Visa Debit transactions on its website.\n    20. The administrator of the Visa Debit system must certify in writing to the Reserve Bank of Australia, on or before 30 November each year, that interchange fees in the Visa Debit system complied with this Standard over the prior twelve months ending 31 October.","sortOrder":0},{"sectionNumber":"Objective","sectionType":"division","heading":"Objective","content":"### Objective\n\nThe objective of this Standard is to ensure that the setting of interchange fees in the designated Visa Debit payment system promotes:\n\n(i) efficiency; and\n\n(ii) competition\n\nin the Australian payments system.","sortOrder":1},{"sectionNumber":"Application","sectionType":"division","heading":"Application","content":"### Application\n\n    This Standard is determined under Section 18 of the Payment Systems (Regulation) Act 1998.\n    This Standard applies to the payment system operated within Australia known as Visa Debit, which was designated as a payment system on 23 February 2004.\n    In this Standard:\n\n    an ‘acquirer’ is a participant in the Visa Debit system in Australia that provides services to a merchant to allow that merchant to accept a Visa Debit card;\n    ‘credit card transaction’ has the same meaning as in the Standard The Setting of Wholesale (‘Interchange’) Fees in the Designated Credit Card Schemes;\n    ‘financial year’ is the 12-month period ending 30 June;\n    an ‘issuer’ is a participant in the Visa Debit system in Australia that issues Visa Debit cards to its customers;\n    ‘merchant’ means a merchant in Australia that accepts a Visa Debit card for payment for goods or services;\n    ‘reference year’ is the financial year prior to the relevant year;\n    ‘relevant year’ is the financial year in which the benchmark must be calculated;\n    ‘Visa Debit card’ means a card issued by a participant in the Visa Debit payment system, under the rules of the Scheme, that allows the cardholder to make payments to merchants for goods or services by accessing a deposit account held at an authorised deposit-taking institution;\n    ‘Visa Debit card transaction’ means a transaction in Australia between a Visa Debit cardholder and a merchant involving the purchase of goods or services using a Visa Debit card (net of credits, reversals and chargebacks);\n    terms defined in the Payment Systems (Regulation) Act 1998 have the same meaning in this Standard.\n    4. This Standard refers to wholesale fees, known as ‘interchange’ fees, which are payable between an issuer and an acquirer, directly or indirectly, in relation to a Visa Debit card transaction.\n    5. Each participant in the Visa Debit system must do all things necessary on its part to ensure compliance with this Standard.\n    6. If any part of this Standard is invalid, the Standard is ineffective only to the extent of such part without invalidating the remaining parts of this Standard.\n    7. This Standard is to be interpreted:\n\n    in accordance with its objective; and\n    by looking beyond form to substance.\n\n    8. This Standard comes into force on the date on which it is published in the Gazette.","sortOrder":2},{"sectionNumber":"Information","sectionType":"division","heading":"Information","content":"### Information\n\n    9. The administrator of the Visa Debit system must provide to the Reserve Bank of Australia data on the number and value of Visa Debit card transactions in Australia in the reference year, if such data are available. In the event that such data are unavailable, the administrator must provide information on the number and value of Visa Debit card transactions in Australia that were processed by the Visa system in the reference year.","sortOrder":3},{"sectionNumber":"Interchange Fees","sectionType":"division","heading":"Interchange Fees","content":"### Interchange Fees\n\n    10. From 1 November 2006, on each of the dates specified in paragraph 11, the weighted average of interchange fees implemented in the Visa Debit system in Australia must not exceed the benchmark calculated in accordance with paragraphs 13 and 14 below.\n    11. For the purposes of paragraph 10, the dates are:\n    (i) 1 November 2006 and 1 November of each third year thereafter; and\n    (ii) the date any interchange fee is introduced, varied or removed in the Visa Debit system.\n    12. For the purposes of paragraph 10, the weighted average of interchange fees is to be expressed as a number of cents per transaction. It is to be calculated by dividing the total interchange revenue that would have been payable had the interchange fees implemented on the dates specified in paragraph 11 been applicable in the previous financial year, by the number of transactions in that year.","sortOrder":4},{"sectionNumber":"Methodology","sectionType":"division","heading":"Methodology","content":"### Methodology\n\n    13. The benchmark is to be calculated by the Reserve Bank of Australia using data for the reference year supplied by the credit card schemes designated by the Reserve Bank of Australia and to which the Standard The Setting of Wholesale (‘Interchange’) Fees in the Designated Credit Card Schemes applies.\n    14. The benchmark is to be calculated as follows:\n    (a) A cost base will be calculated for each designated credit card scheme by dividing the costs of processing and authorisation described in paragraphs 13(i) and 13(iii) of the Standard The Setting of Wholesale (‘Interchange’) Fees in the Designated Credit Card Schemes in the reference year by the total value of credit card transactions in the reference year.\n    (b) A weighted average of the cost bases in the designated credit card schemes will be calculated. The weights to be used are the shares of the value of credit card transactions of each designated credit card scheme in the value of total credit card transactions in the designated credit card schemes in the reference year.\n    (c) This weighted average will be multiplied by the average value of all scheme debit transactions (both MasterCard and Visa) in the reference year, calculated using the data provided to the Reserve Bank of Australia in accordance with paragraph 9, to yield a benchmark expressed as a number of cents per transaction.\n    15. The Reserve Bank of Australia will calculate the benchmark by 30 September of the relevant year and publish it on its website.","sortOrder":5},{"sectionNumber":"Initial and subsequent benchmarks","sectionType":"division","heading":"Initial and subsequent benchmarks","content":"### Initial and subsequent benchmarks\n\n    16. For the initial benchmark the relevant financial year is 2006/07.\n    17. The benchmark is to be re-calculated in the financial year 2009/10 and every three years thereafter.\n    18. The Reserve Bank of Australia may at any time, by notification on its website, waive or suspend the requirement to re-calculate the benchmark, in which case the benchmark in force at that time will continue to apply.","sortOrder":6},{"sectionNumber":"Transparency","sectionType":"division","heading":"Transparency","content":"### Transparency\n\n    19. The administrator of the Visa Debit system must publish the interchange fees applying to Visa Debit transactions on its website.\n    20. The administrator of the Visa Debit system must certify in writing to the Reserve Bank of Australia, on or before 30 November each year, that interchange fees in the Visa Debit system complied with this Standard over the prior twelve months ending 31 October.","sortOrder":7}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"kimi_summary":{"content_quality":"ok","complexity_score":5,"scope_assessment":{"changed":false,"description":"The Standard remains tightly focused on its original purpose: regulating interchange fees in the Visa Debit system. While the compilation note indicates this version incorporates the revocation of related Standards concerning 'Honour All Cards' and 'No Surcharge' rules, the substantive content of this Standard itself has not expanded beyond interchange fee regulation. The document appears to be a consolidated version that maintains its original scope rather than mission creep."},"complexity_factors":["Cross-referencing to external Standards: The calculation methodology in paragraphs 13-14 depends entirely on definitions and cost data from a separate Standard ('The Setting of Wholesale ('Interchange') Fees in the Designated Credit Card Schemes'), requiring readers to consult multiple documents.","Nested calculation methodology: Paragraph 14 involves a three-step mathematical formula (cost base → weighted average → multiplication by average transaction value) with specific weighting mechanisms.","Temporal complexity: Multiple overlapping time periods — 'reference year', 'relevant year', 'financial year', triennial recalculation cycles (paragraphs 16-17), and specific compliance dates (1 November, 30 September, 30 November).","Conditional data provisions: Paragraph 9 contains a fallback mechanism ('if such data are available... In the event that such data are unavailable') requiring alternative data sources.","Dual trigger events: Paragraph 11 specifies compliance dates as both fixed calendar dates (triennial) AND event-based triggers (any change to interchange fees).","10 defined terms in the interpretation section, including circular definitions that rely on the parent Act (Payment Systems (Regulation) Act 1998)."],"plain_english_summary":"The Reserve Bank of Australia sets a cap on the “interchange” fees banks charge each other when customers use Visa Debit, basing the maximum on actual processing costs and reviewed every three years. It forces Visa to publish fees and certify compliance. The Standard affects card issuers, acquirers, merchants and, indirectly, consumers by aiming to lower payment costs and reduce surcharge or price pressure at checkout."},"flash_summary":{"complexity_score":5,"scope_assessment":{"changed":false,"description":"The Standard remains narrowly focused on capping the weighted-average interchange fees in the designated Visa Debit system and on the RBA's calculation and publication of a cents-per-transaction benchmark. While it cross-references cost items from a separate credit-card standard and gives the RBA some administrative discretion (for example, to waive recalculation), those features are procedural and methodological rather than a substantive expansion of scope. There is no clear addition of unrelated powers or a major shift beyond the original purpose of setting and monitoring a system-wide interchange benchmark."},"complexity_factors":["Relatively short instrument but with technical numeric methodology (benchmarks expressed as cents per transaction) (paragraphs 12–14)","11+ defined terms in the Application/Definitions section (issuer, acquirer, merchant, Visa Debit card, reference year, relevant year, etc.)","Cross-reference to another Standard (The Setting of Wholesale (‘Interchange’) Fees in the Designated Credit Card Schemes) for key cost items and methodology inputs (paragraphs 13–14)","Multiple timing triggers (every three years, initial year 2006/07, 1 November review dates, and any date a fee is introduced/varied/removed) creating conditional obligations (paragraphs 11, 16–17)","Obligations placed on different actors (RBA calculates/publishes benchmark; Visa administrator supplies data, publishes fees and certifies compliance) increasing operational coordination (paragraphs 9, 15, 19–20)","RBA discretionary power to waive or suspend recalculation, introducing administrative flexibility (paragraph 18)","Measurement detail: weighted averages computed from hypothetical interchange revenue applied to previous financial year transaction counts (paragraph 12)"],"plain_english_summary":"**What this instrument does (mechanically)**\n\n- This is a Reserve Bank of Australia (RBA) Standard, made under the Payment Systems (Regulation) Act 1998, that caps the weighted average of interchange (wholesale) fees in the Visa Debit payment system in Australia (paragraphs 1, 4, 10).  It requires the RBA to calculate a cents-per-transaction benchmark and requires the Visa Debit system operator to keep fees at or below that benchmark on specified review dates (paragraphs 10–15).\n\n**Who is directly affected**\n\n- Issuers: banks and other institutions that issue Visa Debit cards (defined in the Standard). They receive interchange revenue from acquirers and will be constrained by the benchmark (definitions and paragraph 4).\n- Acquirers: participants that provide merchants the ability to accept Visa Debit cards. They pay interchange fees to issuers (definitions and paragraph 4).\n- Merchants: businesses accepting Visa Debit cards are indirectly affected because changes in interchange can change acquirer charges or merchant pricing (definitions).\n- Visa Debit system administrator: must supply data, publish fees and certify compliance to the RBA (paragraphs 9, 19, 20).\n\n**How it works (step‑by‑step)**\n\n- Data: The Visa Debit system administrator must provide RBA with number and value of Visa Debit transactions for the reference year (paragraph 9).\n- Benchmark calculation: The RBA calculates a benchmark (cents per transaction) using a methodology that: (a) builds a cost base from the designated credit card schemes (using processing and authorisation costs from an associated credit-card standard), (b) forms a weighted average of those cost bases, and (c) multiplies that average by the average value of all scheme debit transactions to yield a cents-per-transaction benchmark (paragraphs 13–14).\n- Timing: The benchmark is first set using 2006/07 as the reference year, recalculated in 2009/10 and every three years thereafter. The RBA must calculate and publish each benchmark by 30 September of the relevant year (paragraphs 16–17, 15). The RBA may waive or suspend the requirement to re-calculate (paragraph 18).\n- Compliance test and triggers: On 1 November 2006 and each 1 November every three years, and on any date an interchange fee is introduced, varied or removed, the Visa Debit system’s weighted average interchange (expressed in cents per transaction) must not exceed the published benchmark (paragraphs 10–12).\n- Transparency and certification: The Visa Debit administrator must publish the interchange fees on its website and certify annually to the RBA that fees complied with the Standard over the previous 12 months (paragraphs 19–20).\n\n**Official objective and how the instrument aims to achieve it**\n\n- Claimed objective: to promote efficiency and competition in the Australian payments system (Objective). The mechanism is a quantitative cap on the system-wide weighted average interchange fee, set by reference to measured processing/authorisation costs in designated credit-card schemes (paragraphs 13–14).\n\n**Who pays, who decides, and what behaviour changes**\n\n- Who pays: interchange fees are payable between issuer and acquirer; in practice issuers receive interchange and acquirers remit it (paragraph 4). Retail merchants and cardholders can be indirectly affected through downstream pricing, merchant service fees or card product design.\n- Who decides: the RBA decides the benchmark and publishes it; the Visa Debit administrator supplies data, publishes actual fees and certifies compliance (paragraphs 9, 13–15, 19–20). The RBA also has discretion to suspend/waive recalculation (paragraph 18).\n- Behaviour changes required: participants must ensure the weighted-average interchange does not exceed the benchmark on review dates and whenever fee changes occur. The administrator must provide data and certify compliance; issuers/acquirers may change fee schedules, routing, card products or commercial arrangements to meet the benchmark constraint (paragraphs 5, 10–12, 19–20).\n\n**Costs, incentives and trade‑offs (practical testing of the stated purpose)**\n\n- Cost base linkage: The benchmark ties allowable debit interchange to a cost measure derived from designated credit-card schemes (paragraphs 13–14). That links debit fee caps to cost characteristics of credit schemes rather than to debit-only costs; this is a mechanical choice that can compress or raise the allowable debit benchmark depending on relative cost structures.\n- Concentrated benefits vs diffuse costs: A cap on interchange constrains issuer revenue from debit transactions (concentrated on issuers). Potential costs are diffuse: merchants, consumers and acquirers may experience small changes in prices, merchant service fees or card product offerings over time.\n- Competitive effects: The Standard aims to promote competition by limiting system-wide interchange levels (Objective). The mechanical effect is uniform cap-compliance rather than mandating differentiated rates or structural separation; competition between issuers/acquirers can still operate within the cap but some pricing or product strategies (e.g. premium debit features funded by higher interchange) may be constrained (paragraphs 10–14).\n- Substitution effects and private responses: Participants may respond by (a) changing acquirer merchant fees, (b) altering card features or marketing, (c) seeking alternative payment rails (non‑Visa debit, cash, EFTPOS, or new schemes), or (d) changing routing or transaction authorisation arrangements to alter the measured weighted average. Those responses are not prohibited and follow from contractual freedom within the cap.\n- Implementation and measurement risk: the benchmark depends on data provision from the Visa administrator and on cost information from designated credit-card schemes (paragraphs 9, 13). Errors, delays, or disagreements on data scope or treatment of reversals/chargebacks may cause measurement disputes.\n\n**Compliance burden and administrative discretion**\n\n- Burden: The Visa administrator must provide historical transaction data, publish current interchange fees, and certify annual compliance in writing to the RBA (paragraphs 9, 19–20). Issuers/acquirers must monitor their weighted average and change pricing if needed (paragraphs 10–12).\n- Discretion and governance: The RBA sets and publishes the benchmark and may suspend/waive recalculation requirements (paragraph 18). The methodology cross‑refers to another Standard for certain cost items, giving the RBA operational discretion in defining the cost base (paragraphs 13–14).\n\n**Implementation risks and unintended consequences to watch for**\n\n- Data gaps or definitional differences between debit and credit scheme data could distort the benchmark.\n- Tying debit caps to credit-scheme cost bases may produce a benchmark that does not reflect actual incremental costs of debit processing.\n- The cap’s system‑wide, weighted‑average nature allows redistribution across transaction types: high interchange for some transactions could be offset by low interchange for others while still meeting the average, affecting who pays or which merchants are targeted.\n\n**Short conclusion (mechanical summary)**\n\n- The Standard requires the RBA to set a cents‑per‑transaction benchmark for the weighted average interchange in the Visa Debit system using a methodology that draws on designated credit card scheme costs; Visa Debit participants must keep the system‑wide weighted average at or below that benchmark on scheduled review dates and when fees change, and the Visa administrator must supply data, publish fees and certify compliance (paragraphs 9–20)."}},"importantCases":[],"_links":{"self":"/api/acts/payment-systems-regulation-act-1998-the-setting-of-interchange-fees-in-the-visa-debit-payment-system","history":"/api/acts/payment-systems-regulation-act-1998-the-setting-of-interchange-fees-in-the-visa-debit-payment-system/history","analysis":"/api/acts/payment-systems-regulation-act-1998-the-setting-of-interchange-fees-in-the-visa-debit-payment-system/analysis","conflicts":"/api/acts/payment-systems-regulation-act-1998-the-setting-of-interchange-fees-in-the-visa-debit-payment-system/conflicts","importantCases":"/api/acts/payment-systems-regulation-act-1998-the-setting-of-interchange-fees-in-the-visa-debit-payment-system/important-cases","documents":"/api/acts/payment-systems-regulation-act-1998-the-setting-of-interchange-fees-in-the-visa-debit-payment-system/documents"}}