Basic change, which seems to be designed to level the paying field in the Australian payments market, due to an unfair advantage previously accorded to Visa. Previous story about ANZ Visa debit here.

As the Bank has previously noted, the current structure of interchange fees creates a strong incentive for financial institutions to promote the Visa Debit system over the EFTPOS system, despite the EFTPOS system having lower operating costs.

If a cardholder makes a payment with an EFTPOS card, the institution that issued the card must pay around 20 cents to the merchant's bank. In contrast, if the payment is made with a Visa Debit card, the institution that issued the card receives around 40 cents on average. This difference in fees is despite both forms of payment accessing a deposit account.

RBA: Media Release-Payments System Reforms

Following a meeting of the Payments System Board on 28 March 2006 the  Reserve Bank of Australia has today released a package of reforms to the EFTPOS and scheme debit systems.

Debit card systems

The reforms to the debit card systems have been developed over a number of years and follow extensive consultation with a wide range of interested parties. Broadly, the reforms involve:

• the adoption of a cap and floor on interchange fees in the EFTPOS system, with the result that these fees, which are paid by financial institutions that issue EFTPOS cards, are likely to fall to around 4 to 5 cents per transaction, from an average of around 20 cents currently;
• the adoption of a cap on the weighted-average interchange fee in the Visa Debit system, with the result that interchange fees in the Visa Debit system, which are paid to financial institutions that issue Visa Debit cards, are likely to fall to an average of around 15 cents per transaction, from around 40 cents currently;
• requiring the Visa system to remove the restrictions on merchants that require them to accept Visa Debit cards if they accept Visa credit cards, and that prohibit merchants from imposing a surcharge on Visa Debit transactions; and
• the adoption of a cap on the price that existing participants in the
  EFTPOS system can charge new and existing participants for establishing
  a connection.

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