The Reserve Bank has released the preliminary conclusions of the 2007/08 review
(pdf) of the payments system reforms undertaken by the Payments System
Board.

In respect of the regulation of
interchange fees, the Board’s view is that further
changes to improve competition are possible, and that these changes
could be implemented by industry, rather than the Reserve Bank. These
improvements to the competitive environment include:

• changes to the EFTPOS system to allow it to compete more effectively with the other card schemes over the longer term;
• the
  card schemes allowing merchants the freedom to make independent
  acceptance decisions about each type of card for which a separate
  interchange fee applies; and
• an increase in the transparency of interchange fees and scheme fees.

The Board is
proposing that, at its August 2009 meeting, if at that time it were satisfied that sufficient progress
had been made by industry, it would proceed to remove the interchange
regulations. If, however, the Board judged that insufficient progress
had been made, its current thinking is that interchange regulation
would continue, with average interchange fees on credit cards being
reduced from around 0.50 per cent of the transaction value to around
0.30 per cent. In addition, a common interchange fee of around 5¢, paid
to the cardholder’s financial institution, would be established for the
EFTPOS system and the debit card system operated by the international
card schemes.

Any new arrangements could be expected to
be in place in the first quarter of 2010. Until this time, the current
arrangements, with some minor modifications, would remain in place. 

The
Bank is seeking submissions from interested parties by 30 June 2008.