Visa calls for payments regulation to be forward-looking in submission to RBA Review


SYDNEY - In its submission to the Reserve Bank of Australia’s Card Payments Review, in response to draft reforms, Visa has continued to emphasise the need for forward-looking regulation to future-proof payments in a rapidly changing environment.

Stephen Karpin, Group Country Manager for Visa in Australia, New Zealand and South Pacific said, “Australians are among the world’s earliest adopters of new ways to pay. In order for Australia to continue leading the world in payments innovation, the regulatory framework must be balanced to enable flexibility and agility in a changing sector.”

In its submission, Visa highlights the need for:

1. Greater steps to level the playing field in payments. While Visa believes the RBA Review has taken a number of positive steps to regulate an additional participant in the payments system, further steps must be taken to address the imbalances which remain to deliver a truly level playing field within the Australia market. The exclusion of existing unregulated payment systems from these reforms continues to sustain a competitive disparity in the payments system at a cost to the Australian economy, most notably to consumers and merchants 1.

2. Exclusion of foreign-issued card transactions. Visa is concerned with the proposed inclusion of foreign-issued card transactions in the RBA’s draft interchange standards, which would represent a globally unprecedented regulatory intervention with potential adverse consequences for the Australian community. The draft standards fail to acknowledge the major differences in the nature of international versus domestic transactions, including increased fraud prevention costs, greater settlement and clearance requirements, and a range of more complex processes that exist when a payment from international consumers and businesses is conducted with Australian merchants.

3. Enhanced limitations on surcharging. Visa’s consistent view is that excessive merchant surcharging is an unfair cost to consumers. Visa supports the introduction of enforcement powers and greater clarity for merchants and consumers that limit surcharging to the reasonable cost of acceptance.

4. Competition in the commercial payments space. Visa continues to recommend that commercial cards be excluded from the regulatory regime. The marketplace dynamics in commercial cards differ significantly to consumer payments and justify differing interchange conditions which the proposed standards would prevent. Implementation of interchange regulation as currently drafted could result in a migration of currently lower cost commercial transactions to higher cost three-party models, thus stifling competition and producing an even greater regulatory imbalance.

“Card-based electronic payments are not as widely adopted in the commercial sector as they are among consumers and the profit drivers for issuers of these products differ significantly from consumer cards,” said Karpin. “Applying the same consumer-focused regulation to commercial payments will reduce product availability and stifle innovation that would benefit Australian businesses, particularly for those in the SME segment, where card-based payments enhance efficiencies and reduce costs,” added Karpin.

In its submission, Visa has also provided views on the proposed timing change to the interchange reset cycle, recommending the RBA, at a minimum, moves to a 12 month moving average.

Visa has actively participated throughout the RBA Review process and will continue to consult as the proposed reforms are finalised.


1 Deloitte Access Economics Report is the attachment to Visa’s second submission to the Financial System Inquiry. Available at


About Visa

Visa Inc. (NYSE: V) is a global payments technology company that connects consumers, businesses, financial institutions, and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. We operate one of the world's most advanced processing networks — VisaNet — that is capable of handling more than 65,000 transaction messages a second, with fraud protection for consumers and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, pay ahead of time with prepaid or pay later with credit products. For more information visit and @VisaNewsAU.

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Teneille Rennick
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