Consultation on Preliminary Conclusions to the Review of Retail Payments Regulation

At its meeting on 21 May, the Payments System Board approved a consultation on a proposed package of policy actions related to the Bank’s retail payments regulation. The Bank has today released a Consultation Paper setting out the proposed policy actions, together with draft variations to the standards for card payment systems. This follows extensive stakeholder consultation by the Bank on the matters raised in the Issues Paper for the review, which was published in November 2019.

In general, the Board is not proposing major reforms to the Bank’s retail payments regulation. Australia’s payments system is in most regards providing high-quality services for Australian households, businesses and government entities. The Bank’s earlier reforms to card payments regulation have contributed to this outcome. Accordingly, the key policy changes proposed are relatively modest and relate mostly to: dual-network debit cards and least-cost routing; interchange fees; and the transparency of scheme fees. Extensive consideration has also been given to the no-surcharge rules imposed by some ‘buy now, pay later’ (BNPL) providers.

A summary of the key policy proposals is provided in the Executive Summary.