Credit Groups Cry Foul As Retailers Save $430m
The Age
Friday July 16, 2004
Banks have slashed credit card scheme fees, saving merchants $430 million since October, according to research by the Reserve Bank of Australia.
The RBA found that since its reforms to credit card interchange fees, the fees charged by banks in the Bankcard, MasterCard and Visa credit card schemes had fallen by 35 basis points. Merchant services fees for American Express and Diners Club fell by less than 10 basis points, widening the premium that merchants pay to accept those cards.The findings are expected to anger traditional bank brands Visa and MasterCard, which have told the RBA its reforms are unfair.Because Amex and Diners process transactions through their own networks, they are not regulated by the RBA. The RBA regulates the "open" system used by Visa, MasterCard and Bankcard. "These results are not surprising," a spokesman for Visa International said, adding that the RBA changes had "exacerbated" differences between Visa and MasterCard and their competition.The controversy was renewed earlier this week when National Australia Bank became the latest to launch an Amex credit card aimed at big spenders who usually pay little interest but accrue hefty loyalty points. NAB denied that the card was an attempt to circumvent the credit reforms.The RBA report concludes that there are a "number of possible explanations for the relatively small decline" in the average merchant service fee of the third-party schemes.The bank is now reviewing the impact of the rule changes and the recent launches to see if the complaints by Visa, MasterCard and Bankcard are justified.
© 2004 The Age
