1Payment Systems (Regulation) Act 1998 - The Setting of Wholesale ('Interchange') Fees in the Designated Credit Card Schemes

The Setting of Wholesale ('Interchange') Fees in the Designated Credit Card Schemes

as amended

made under section 18 of the

Payment Systems (Regulation) Act 1998

This compilation was prepared on 18 December 2008
taking into account amendments up to Variation of Interchange Fee Standards, published in the Commonwealth Gazette on 10 December 2008

Prepared by the Payments Policy Department, Reserve Bank of Australia

Standard

The Setting of Wholesale (‘Interchange’) Fees in the Designated Credit Card Schemes

Objective

The objective of this Standard is to ensure that the setting of wholesale (‘interchange’) fees in each designated credit card scheme is transparent and promotes:

(i) efficiency; and

(ii) competition

in the Australian payments system.

Application

1. This Standard is determined under Section 18 of the Payment Systems (Regulation) Act 1998.

2. This Standard applies to the payment systems operated within Australia known as the MasterCard system and the VISA system, which were designated as payment systems on 12 April 2001 by the Reserve Bank of Australia under Section 11 of the Payment Systems (Regulation) Act 1998, each of which is referred to in this Standard as a Scheme.

3. In this Standard:

an ‘acquirer’ is a participant in a Scheme in Australia that provides services to a merchant to allow that merchant to accept a credit card;

‘credit card’ means a card issued under the rules of a Scheme that can be used for purchasing goods or services on credit, or any other article issued under the rules of that Scheme and commonly known as a credit card;

‘credit card transactions’ or ‘transactions’ means transactions in the relevant Scheme in Australia between a credit cardholder and a merchant involving the purchase of goods or services using a credit card of that Scheme (net of credits, reversals and chargebacks);

‘financial year’ is the 12-month period ending 30 June;

an ‘issuer’ is a participant in a Scheme in Australia that issues credit cards to the issuer’s customers;

‘merchant’ means a merchant in Australia that accepts a credit card for payment for goods or services;

‘nominated Scheme participants’ for a Scheme are those issuers that issued, in aggregate, credit cards which were used in at least 90 per cent of credit card transactions by value in the Scheme in Australia in the financial year prior to the date by which the applicable cost-based benchmark must be calculated, those issuers being determined by the administrator of the Scheme or the other participants in the Scheme in Australia;