Rba Imposes Eftpos Cap

The Age

Thursday September 14, 2006

MARC MONCRIEF

THE Reserve Bank has capped the fees paid between banks when customers use Eftpos cards.

Interchange fees at present average about 20? per transaction, but the RBA cap will keep interchange fees at 5? per transaction until November 1, 2009. After that, the cap will be recalculated according to a process negotiated between the RBA and the Australian Payments Clearing Association.

The RBA has also imposed a floor on the fees at 80 per cent of the cap, meaning banks and other Eftpos machine issuers can charge between 4? and 5? per transaction.

The decision is a compromise between retailers, who wanted the fees abolished completely, and banks, which have previously set the prices.

But the compromise is far from final as the entire system will be subject to a review next year. A spokeswoman for the Australian Bankers Association demanded that the review be carried out by an independent party.

Retailers are concerned that banks will recover the lost revenue from businesses that offer the Eftpos system to their customers.

LINK

See the RBA's decision at tinyurl.com/fhe5k

© 2006 The Age

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