Media Release Dual-network Debit Cards

At its meeting on 16 August, the Payments System Board welcomed the outcome of discussions that Bank staff have had involving the three debit card networks (eftpos, MasterCard and Visa) over dual-network debit cards. The Board judged that the outcome was in the public interest, and that a consultation on possible regulatory intervention – which the Board had authorised at its August 2012 meeting – appeared to be unnecessary at present.

Dual-network debit cards are cards issued by banks and other financial institutions with point-of-sale debit functionality from two payment networks. The Board has previously indicated that it supports the longstanding practice of issuing such cards in Australia, because they are convenient for cardholders and allow stronger competition between networks at the point of sale. However, the Board had been concerned that actions by particular networks, including with respect to contactless cards, could inhibit competition, limit consumer choice and increase costs. It has noted that authorities in other jurisdictions have taken actions to help ensure that the costs involved in debit card transactions are held down.

Following discussions between the networks and the Bank, the three networks have agreed to address the Board's concerns. The outcome will safeguard the rights of Australian card-issuing banks and institutions to maintain existing dual-network arrangements in the contactless environment. Where an issuer wishes to include applications from two networks on the same card and chip, the networks have agreed to work constructively with the issuer to allow this. The networks have also agreed not to prevent merchants exercising choice in the networks they accept, in both the contact and contactless environments. In addition, the networks have agreed not to prevent merchants from exercising their own transaction routing priorities when there are two contactless debit applications on one card.

The Board considers this voluntary agreement on principles relating to dual-network debit cards to be a positive development. It has asked the Bank's staff to maintain liaison with the industry on dual-network card issues and to monitor market developments and technological changes in the industry. While market forces are likely to lead to competition for the payment flows of very large merchants, the Board will continue to take an interest in trends in payment costs for smaller merchants.