Review of the Regulatory Framework for the eftpos System: Consultation on Designation – March 2012 1. Introduction

The Payments System Board announced in September 2011 that it would undertake a review of the regulatory framework for the eftpos system to ensure the regulations continue to meet their objectives. This consultation paper marks the first public element of that review. It seeks views on an appropriate definition for the eftpos system, should a new designation be required to support future regulation of the system. The Board's view is that the current designation is no longer appropriate given the changes to the eftpos system that have occurred since it was first designated in 2004.

This consultation is a necessary precursor to a second consultation on the broader regulatory framework for the eftpos system that will be conducted later in the year. While the broader issues to be considered in the second consultation are not the focus of the current consultation, they may have some bearing on views about the approach to designation. The paper, therefore, also provides a brief indication of these broader issues.

Section 2 of the paper outlines the current regulatory framework for the eftpos system and explains the changes to the system that have taken place in recent years. Section 3 explains the reasons why a new designation is needed, how it would be implemented and possible options for defining the eftpos system in a new designation. As background, Section 4 provides information on the broader review of the regulatory framework for the eftpos system that will take place later in the year. Section 5 provides details of the next steps in the process.