Visa calls on RBA Review to support investment in Australia’s payment security and innovation
Visa welcomes the consideration of surcharging reform while reinforcing that a resilient and future-ready payments system in Australia will require appropriate levels of investment and a balanced regulatory approach, in its submission to the Reserve Bank of Australia’s (RBA) Review of Merchant Card Payment Costs and Surcharging.
Alan Machet, Visa’s Group Country Manager for Australia, New Zealand and South Pacific said, “Australians have long been early adopters of new payment experiences and today have more choice than ever in how to pay and be paid. We support the RBA’s continued efforts to develop a fit-for-purpose solution for both businesses and consumers in this increasingly complex payment landscape and urge them to consider the substantial industry investment required to ensure security keeps pace with innovation, and steps ahead of cybercriminals.”
“Together with the RBA, Government and payments industry, we are committed to supporting a safe and efficient payment system that drives growth for businesses and the wider economy and secures Australia’s reputation as a leader in digital commerce. Visa is focused on ensuring any measures do not lead to uncertainties or unintended consequences for consumers and businesses.”
In its submission, Visa has called on the RBA Review to:
- Revise the surcharging framework to address growing concerns about surcharging, especially excessive surcharging
Visa has a longstanding global position of not supporting surcharging, given its negative impact on both consumers and merchants. We believe Australian consumers should not be penalised for choosing to pay in a manner that is a fast, seamless and secure experience for all parties. A recent study by YouGov suggests nearly all Australians surveyed (93 per cent) view surcharges as hidden costs that should be included in the displayed price.
Visa’s view is that if a ban on surcharging is to be introduced, then it should apply to both debit and credit products for regulated networks only.
- Maintain a balanced regulatory environment that promotes security, choice, and competition for Australian consumers and businesses
The future of commerce in Australia will require new and more advanced payment solutions than those that exist today and ensuring there are appropriate levels of investment will be critical in supporting that evolution.
Visa continues to recommend that domestic interchange fee rates should remain at current levels and further compression would impact innovation, security and the resilience of the ecosystem, especially for smaller financial institutions.
Interchange regulation should not be extended to foreign card transactions in Australia as these transactions carry elevated risk, with cross-border card-not-present fraudgrowing more than 4 times faster than domestic fraud.[2] Enabling safe and seamless cross-border transactions, which support personal and business tourism, trade and foreign investments and allow merchants to access a global consumer base around the world, requires additional investment in technology to monitor and prevent fraud and manage risk, such as zero liability for fraudulent transactions, chargeback processing, and cybersecurity capabilities. Additionally, extending interchange regulation to foreign card transactions would have a low impact on merchant costs overall.
- Ensure a level playing field across the Australian payments landscape
The RBA has regulated four-party model card payment networks, such as Visa, since the early 2000s. Today there are a plethora of new players bringing new payment products and services into the market, and many of these new entrants are not subject to oversight by the RBA. Visa’s consistent view is that there is an overriding imperative for regulators to create a more level playing field by widening this scope first, before any additional regulation is applied to established entities.
In this regard, the RBA should ensure that any regulation resulting from this Review does not lead to further entrenchment of an unlevel playing field within Australia’s digital payments ecosystem.
Visa remains committed to working collaboratively with the RBA and we look forward to engaging further with the Bank on the Issues Paper in the spirit of continuing to build a digital payments ecosystem that supports Australia’s economic ambitions and delivers secure, efficient, and inclusive outcomes for all.
