Payment Systems (Regulation) Act 1998 - Access Regime for the MasterCard Credit Card System

This instrument is the Access Regime for the MasterCard credit card system, imposed under section 12 of the Payment Systems (Regulation) Act 1998 (para 1). It designates the MasterCard system as the Scheme to which the regime applies (para 2) and sets out eligibility, assessment, transparency and reporting rules that the Scheme administrator and participants must follow. The stated objective is to promote efficiency and competition in the Australian payments system, having regard to (i) interests of current participants, (ii) interests of potential future participants, (iii) the public interest and (iv) financial stability of the designated system (Objective).

Mechanically, the Access Regime does the following:

• Identifies which entities may apply to participate: authorised deposit-taking institutions and former specialist credit card institutions, and other entities that meet any eligibility criteria the Scheme administrator may set (paras 8-10).
• Requires the administrator to establish and apply assessment criteria for applications to participate (para 11), subject to constraints on discriminatory treatment between classes of entities (paras 12-13).
• Prohibits rules or participants from preventing a participant from being an issuer only, an acquirer only, or both (para 14), and from imposing fees or penalties that relate to a participant’s relative issuing versus acquiring activity (para 15).
• Allows a participant to be a self acquirer where it can reasonably show capacity to meet acquirer obligations (para 16).
• Imposes continuous transparency obligations on the administrator as to eligibility and assessment criteria, the risks sought to be addressed, and maximum assessment timeframes (para 17), and imposes procedural obligations to provide an estimate of assessment time to applicants (para 18), to assess applications without undue delay (para 19) and to provide written reasons within one month if an application is rejected (para 20).
• Requires an annual certification and detailed report to the Reserve Bank by 31 July about compliance with the regime and particulars of applications and participant changes (para 21).

The document also contains definitions that govern scope, including definitions of “acquirer”, “issuer”, “merchant”, “rules of the Scheme”, “authorised deposit-taking institution”, “specialist credit card institution” and “former specialist credit card institution” (para 3). It includes interpretative directions to read the regime in accordance with its objective and to look beyond form to substance (para 6), a general obligation that each participant must do what is necessary to ensure compliance (para 4), and a severability clause (para 5). The compilation date and amendment history are recorded (Compilation start date 1 January 2015; variation F2014L01760; regime originally in force 23 February 2004; amended version in force 1 January 2015) (final paragraphs and endnotes).

The Access Regime is conceptually framed around several discrete legal and administrative constructs set out in the text.

Objective-driven interpretation. The regime prescribes an express objective to promote efficiency and competition in the Australian payments system while having regard to current and potential participants, public interest and financial stability (Objective). Paragraph 6 requires interpretation to accord with that objective and to look beyond form to substance. Those twin instructions constrain the application of the other rules: eligibility, assessment, transparency and reporting must be read through the lens of those priorities.

Eligibility and assessment. Eligibility for application is defined in tiered terms. Primary eligible applicants are authorised deposit-taking institutions and former specialist credit card institutions (para 8). The Scheme administrator may also establish eligibility criteria for other entities where such criteria are reasonably related to the risks the participation might pose to the Scheme or its participants, merchants or cardholders (para 9). Once eligibility is determined, the administrator must establish and apply assessment criteria for admission (para 11). Paragraphs 12 and 13 limit discriminatory treatment: the rules, administrator or participants must not discriminate between specialist credit card institutions as a class and other ADIs as a class except to the extent reasonably required to assess and address risks; similarly, they must not discriminate against an entity or class of entity except to the extent reasonably required to address risks (paras 12-13). Those paragraphs embed a risk-based test as the permitted ground for differentiation.

Functional separation and parity. The regime mandates that participants may be issuer only, acquirer only or both (para 14). It also forbids the imposition of fees, charges, loadings or penalties that are a consequence of or related to a participant’s activity as an acquirer relative to its activity as an issuer (para 15). These provisions secure functional choice and prohibit cross-activity penalisation within the Scheme.

Self-acquiring. A participant may be a self acquirer provided it can reasonably establish under the Scheme rules that it has capacity to meet acquirer obligations (para 16). This creates a capacity test rather than an outright bar.

Transparency and procedural fairness. The administrator must continuously publish on the Scheme’s website the eligibility and assessment criteria, the risks those criteria address, and the maximum time it will take to assess any application (para 17). Applicants must receive an estimate of assessment time (para 18), and the administrator must assess applications without undue delay (para 19) and provide written reasons within one month if rejecting an application (para 20). These are procedural obligations designed to make the assessment process visible and time-bounded.

The instrument names and defines the universe of directly affected parties and the administrative actor that must implement the regime.

Administrator of the Scheme. The administrator of the MasterCard Scheme is the entity authorised to establish eligibility and assessment criteria and to admit participants to the Scheme (paras 9, 11, 17). The administrator bears the principal compliance duties under the regime: publishing criteria and risks, providing time estimates to applicants, conducting timely assessments, furnishing written reasons for rejections within one month and delivering an annual certificate and detailed list to the Reserve Bank by 31 July (paras 17-21). The administrator therefore is the principal decision-maker and the party responsible for transparency and reporting.

Participants in the Scheme. “Participant” means entities participating in the Scheme in Australia (various paras). The regime directly binds participants: each participant must do all things necessary on its part to ensure compliance with the Access Regime (para 4). Participants include issuers and acquirers; defined roles matter because the regime guarantees the right to be issuer only, acquirer only or both (para 14) and bars fee differentials between issuing and acquiring activities (para 15). Participants are also subject to anti-discrimination constraints embedded in assessment and the application of criteria (paras 12-13).

Eligible applicants. The regime specifies who may apply. Any authorised deposit-taking institution or former specialist credit card institution is eligible to apply (para 8). The administrator may set eligibility criteria for entities other than those two categories, provided the criteria are reasonably related to risks (para 9). If such criteria are established, they must be applied in accordance with their terms (para 9). Entities other than ADIs and former specialist institutions are eligible to apply only if they meet those criteria (para 10). The inclusion of “former specialist credit card institution” with a specific reference to entities that as at 31 December 2014 met a defined regulatory state creates a narrow transitional class (para 3).

Merchants and cardholders, indirectly. The regime’s objective expressly requires consideration of merchants and cardholders (Objective). While merchants and cardholders are not directly regulated by the text, many provisions are risk-calibrated to protect merchants, cardholders and the Scheme (paras 9, 12-13). Changes to participation or admission practices by the administrator can therefore affect merchants’ acquiring options and cardholders’ issuing options indirectly.

This regime creates duties for the Scheme administrator and participants, and rights for applicants and participants. The following sets out those obligations and entitlements with reference to the governing paragraphs.

Duties of the administrator

• Establish and apply assessment criteria for admission of eligible applicants (para 11). The administrator may do so through the Scheme rules or otherwise.
• Publish continuously on the Scheme’s website the eligibility criteria, the assessment criteria and the risks those criteria seek to address, and the maximum time for assessing an application (para 17).
• Provide to applicants an estimate of the time it will take to assess their application (para 18).
• Assess applications in a timely manner without undue delay (para 19).
• Provide written reasons within one month where an application is rejected (para 20).
• Certify to the Reserve Bank on or before 31 July each year that the administrator complied with the Access Regime during the reporting period and provide detailed lists and dates relating to applications admitted, rejected or outstanding and entities ceasing to be participants (para 21(a)-(c)).

Duties of participants

• Each participant must do all things necessary on its part to ensure compliance with this Access Regime (para 4). The regime does not further enumerate participant-specific operational duties in the text, but this general duty imposes an affirmative compliance obligation.

Rights of applicants and participants

• Eligible entities have the right to apply to participate in the Scheme (paras 8, 10). For entities outside the ADI and former specialist classes, eligibility depends on meeting any eligibility criteria the administrator properly establishes (para 9).
• Applicants are entitled to receive an estimate of assessment time (para 18), to have the administrator assess their application without undue delay (para 19) and to receive written reasons within one month if rejected (para 20).
• Participants have the right to participate in one or both functional roles: issuer only, acquirer only, or both (para 14). They also have a right to be free from fees, charges, loadings or penalties imposed on account of their acquirer activity relative to issuing activity (para 15).
• A participant has the right to be a self acquirer if it can reasonably establish under the rules that it has the capacity to meet the obligations of an acquirer (para 16).

The Access Regime text does not itself set out express penalties or enforcement mechanisms within its paragraphs. The instrument states it is imposed under section 12 of the Payment Systems (Regulation) Act 1998 (para 1), and it requires the administrator to provide an annual certificate and detailed report to the Reserve Bank (para 21). Beyond those obligations and reporting duties, the Access Regime is silent on civil penalties, criminal sanctions, licence cancellations or specific enforcement processes.

Interpretation and practical enforcement avenues that follow from the text

• Administrative accountability to the Reserve Bank. The annual certification and detailed reporting obligation (para 21) creates an administrative accountability mechanism. The submission must certify compliance with the regime and list applications, admissions, rejections, dates and reasons. The Reserve Bank is therefore positioned as the recipient of compliance information, but the regime does not itself specify follow-on actions the Reserve Bank may take where non-compliance is reported.
• Transparency as an enforcement lever. The requirement for continuous publication of eligibility and assessment criteria, the risks those criteria are intended to address, and the maximum time for assessment (para 17), together with the obligation to give applicants an estimate of assessment time and written reasons for rejection within one month (paras 18 and 20), create procedural obligations that facilitate scrutiny by applicants, competitors, merchants and the Reserve Bank. This transparency supports reliance and complaint mechanisms outside the text, but the regime itself does not confer a private right of action or prescribe remedies.
• Participant duty to ensure compliance. Paragraph 4 places a general duty on each participant to do all things necessary on its part to ensure compliance. That clause allocates responsibility internally to participants, but does not specify sanctions for breaches.

What is not in the text

• No penalty clauses. The regime contains no express power to impose fines or civil pecuniary penalties, no criminal offences, and no specified dispute resolution or appeal route against admission decisions beyond the requirement to provide reasons for rejection within one month (para 20).
• No detailed enforcement procedures. The text does not set out inspection powers, remedial directions or administrative enforcement steps that the Reserve Bank or another authority must take where the administrator or participants fail to comply.

The Access Regime expressly cross-references and imports definitions and statutory relationships from other federal legislation, and situates the Scheme within the regulatory architecture of Australian banking and payment systems.

Parent enabling statute

• Payment Systems (Regulation) Act 1998. The regime is imposed under section 12 of the Payment Systems (Regulation) Act 1998 (para 1). Paragraph 3 also states that terms defined or having a meaning in the Payment Systems (Regulation) Act 1998 have the same meaning in this Access Regime. That explicit cross-reference means interpretative and definitional questions will often require consulting the parent Act for the statutory definitions and any procedural or enforcement provisions contained there.

Banking Act references

• Authorised deposit-taking institution. The regime defines “authorised deposit-taking institution” by reference to section 5(1) of the Banking Act 1959 (para 3). Therefore entities that qualify as ADIs under the Banking Act are expressly eligible to apply under para 8. Readers must consult the Banking Act to determine ADI status in specific cases.

Regulations under the Banking Act

• Former specialist credit card institution. The category of “former specialist credit card institution” is defined with reference to Regulation 4 of the Banking Regulations 1966 and to a temporal test as at 31 December 2014 (para 3). This ties the regime to pre-existing regulatory classification and creates a transitionally defined class of institutions eligible to apply.

Corporations Act references

• Related body corporate. The definition of “self acquirer” references related body corporate as defined in the Corporations Act 2001 (para 3). That cross-reference means tests of corporate relationships and control regimes under the Corporations Act will be relevant when assessing whether an acquirer is a “self acquirer”.

Scheme rules and private contracts

• Rules of the Scheme. The regime makes frequent reference to the “rules of the Scheme” , which it defines to mean the constitution, rules, by-laws, procedures and instruments of the Scheme as applied in Australia and any other arrangements by which Scheme participants consider themselves bound (para 3). The administrator may establish eligibility and assessment criteria “through the rules of the Scheme or otherwise” (paras 9, 11). The regime therefore sits alongside the Scheme’s private law instruments. It constrains those instruments to the extent they would, for example, prevent a participant from being issuer only or acquirer only (para 14), or impose fees that penalise acquiring relative to issuing (para 15), or prohibit self acquiring contrary to para 16.

The compilation reproduces the regime as in force on 1 January 2015 and records a limited amendment history in the endnotes. The key amendment facts in the compilation are as follows.

Origins and original commencement

• The Access Regime originally came into force on 23 February 2004 (final paragraphs). The compilation includes the amended text that comes into force on 1 January 2015 (para 7).

Recorded variation

• The endnotes record a variation titled “Variation to the Access Regimes for MasterCard and Visa Credit Card Systems” with FRLI registration or gazettal date 19 December 2014 and a commencement date of 1 January 2015 (Endnote 3). The compilation reflects those amendments.

Provision-level amendment notes

• Endnote 4 (Amendment history) lists the specific provisions affected and how they were changed by the variation F2014L01760. The endnote shows multiple amendments and additions, including:
  • The heading “Access Regime” amended and various paragraphs renumbered or amended.
  • Paragraphs 9, 10 and 11 were added (ad F2014L01760).
  • Paragraph 21 was added (ad F2014L01760).
  • A number of paragraphs were renumbered and amended (see the table in Endnote 4).

Compilation metadata

• The compilation start date is 1 January 2015 and the compilation was prepared on 1 January 2015 (Compilation header).
• The endnotes provide structured information about amending laws, commencement dates and any application, saving or transitional provisions that are relevant but not included in the text (Endnote 1).

No uncommenced amendments or modifications recorded

• Endnote 5 states there are no uncommenced amendments included in this compilation ([none]).
• Endnote 6 indicates no modifications are recorded ([none]).

Other endnotes

• Endnotes 7 and 8 list misdescribed amendments and miscellaneous items respectively; both are empty in this compilation ([none]).

Practical consequences of the amendment history

• The presence of the December 2014 variation, with an effective date of 1 January 2015, is the proximate cause of several of the regime’s provisions in the current text, such as the added transparency and reporting rules (paras 17 and 21), the detailed eligibility and assessment provisions (paras 9-11) and the renumbering/amendment of interpretative paragraphs (para 6, para 7). The endnote table indicates which provisions were added or amended and should be consulted for a clause-by-clause historical trace.

This compilation contains no litigation history or references to judicial decisions arising under this Access Regime. The endnotes and the body of the instrument do not record any cases, proceedings, appeals or litigation outcomes.

What is recorded in the compilation

• The endnotes focus on statutory amendment history, definitions and compilation metadata (Endnotes 1-4). They include an explicit note structure for legislative history, amendment history and miscellaneous items, but none of those endnotes report any judicial proceedings.

Implications for research

• The absence of litigation history in the compilation does not establish that no litigation has occurred in practice; it only indicates that this compilation does not include such material. For any reported judicial treatment of the regime, parties should search case law databases and court registries for relevant proceedings under the Payment Systems (Regulation) Act 1998, disputes involving Scheme admission decisions, or disputes invoking the rights and duties set out in this Access Regime.

What the regime itself provides about dispute facts

• The regime imposes procedural obligations on the administrator, such as providing written reasons within one month for rejected applications (para 20), which could form the basis for administrative or contractual disputes. The regime nonetheless does not itself create an internal appeal route or a statutorily mandated dispute resolution mechanism within its text. If disputes arise, their resolution will depend on applicable law outside this text and on the Scheme’s own rules where those rules provide processes for review or arbitration.

Recommended next steps if litigation history is required

• Consult the Reserve Bank and the Payment Systems (Regulation) Act 1998 for related enforcement or oversight actions that might have prompted litigation.
• Search judicial and tribunal databases for proceedings referencing the MasterCard access regime, the Scheme’s rules, or complaints about admission or discrimination in payment systems.
• Review Scheme rules and any contractual arrangements between the administrator and participants for internal dispute resolution clauses that could have led to litigation.

In summary, the compilation records amendment and administrative history but contains no litigation history. Practitioners must look beyond this compilation for case law or dispute materials.

This regime contains several provisions and cross-references that create potential pitfalls for Scheme administrators, applicants and participants. The following points draw out areas where literal reading, timing, evidence or interpretation risks may arise, with reference to specific paragraphs.

Risk-based exceptions to non-discrimination (paras 12-13)

• Paras 12 and 13 prohibit discrimination between classes of entities except to the extent reasonably required to assess and address risks to the Scheme, participants, merchants or cardholders. The qualifier “reasonably required” introduces an evaluative standard. Administrators may be exposed to challenge if they assert risk-based differentiation without documented, objective risk assessments that demonstrate why differential treatment was necessary. The regime requires transparency about the risks that eligibility and assessment criteria seek to address (para 17), so administrators should expect scrutiny of any claimed risk rationale.

Ambiguity in what constitutes “reasonably related” risk (para 9)

• Paragraph 9 allows the administrator to establish eligibility criteria for non-ADI entities provided those criteria are “reasonably related to the risks” of participation. That phrase is open-textured; the administrator’s exercise of discretion should be supported by evidence of risk analysis. Absent clear record-keeping, the administrator may struggle to justify exclusions or tougher entry conditions for certain applicants.

Temporal transition for “former specialist credit card institution” (para 3)

• The definition relies on an institution’s regulatory status as at 31 December 2014. Entities whose status is unclear or who changed corporate form around that date may face uncertainty about whether they fall within that transitional class. The narrowness of the definition limits who can rely on it; practitioners should verify dates and regulatory classifications carefully.

Interpretation instruction to “look beyond form to substance” (para 6(b))

• The regime mandates interpretation that looks beyond form to substance. This can complicate compliance when Scheme rules or internal procedures are structured formally to comply with the letter of the regime but not necessarily its substance. Administrators and participants should ensure that their operational practices demonstrably reflect the regime’s substance, not merely formal compliance.

Obligations to publish and update continuously (para 17)

Compliance with the Access Regime requires operational, legal and reporting steps aligned to its express duties. The following is a practical, source-grounded checklist mapped to the relevant paragraphs, suitable for Scheme administrators, participants and prospective applicants.

For Scheme administrators

1. Eligibility and assessment criteria

   • Draft and record eligibility criteria and assessment criteria, ensuring that any criteria for non-ADI entities are “reasonably related to the risks” of participation (paras 9-11).
   • Document the risk assessment methodology and evidence supporting why each criterion addresses specific risks to the Scheme, participants, merchants or cardholders (paras 9, 11-13).

2. Non-discrimination documentation

   • Prepare written justification for any differential treatment between classes of entities or between particular applicants, showing why the differential is “reasonably required” to assess and address risk (paras 12-13).
   • Ensure that Scheme rules do not, as a class, discriminate between specialist credit card institutions and other ADIs except on demonstrably risk-related grounds (para 12).

3. Publication and information management

   • Implement a continuously accessible section on the Scheme website that publishes the eligibility criteria, assessment criteria and the risks each criterion seeks to address, together with the maximum time for assessment (para 17).
   • Maintain versioned archives of published material with timestamps to demonstrate continuous publication and to support audits or disputes (para 17).

4. Application processing systems

   • Implement a case management system that records application receipt dates, the estimation of assessment time provided to applicants, dates of proposals of terms, dates of final decisions and the dates and contents of admission or rejection communications (paras 18-21).
   • Ensure that the system can generate reports to populate the annual certificate to the Reserve Bank (para 21).

5. Time-bound communications

   • Establish procedures to provide applicants with a written estimate of assessment time promptly upon application (para 18).
   • Prepare templates and approval workflows so that written reasons for rejection can be provided within one month of rejection (para 20).