Commonwealth Numbered Regulations - Explanatory Statements

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PAYMENT SYSTEMS (REGULATION) AMENDMENT REGULATIONS 2009 (NO. 1) (SLI NO 44 OF 2009)

EXPLANATORY STATEMENT

 

Select Legislative Instrument 2009 No. 44

 

 

Issued by authority of the Treasurer

 

 

Payment Systems (Regulation) Act 1998

 

Payment Systems (Regulation) Amendment Regulations 2009 (No. 1)

 

The Reserve Bank of Australia (RBA) has put in place reforms to promote competition and efficiency in the Australian ATM system. These reforms are part of a broader suite of reforms undertaken by the RBA since 2004 which are designed to promote competition and efficiency in the payments system by putting in place transparent pricing and improving ease of access into the ATM system.

To implement the ATM reforms, industry may voluntarily enter into collective agreements relating to access and pricing that could breach Part IV of Trade Practices Act 1974 (TPA). Section 51 provides for an exception from the TPA.

The Payment Systems Board (PSB) of the RBA designated the ATM system at its 10 December 2008 meeting, and established an Access Regime on 24 February 2009, to take effect on 3 March 2009.

The Access Regime has two major components. First it states that no interchange fee can be charged on foreign ATM transactions unless the interchange fee is being paid by a participant with a one way agreement to access only one ATM, or unless a participant is a member of an ATM sub-network. This addresses the concern that negotiations over interchange fees, which are a price of access for new entrants, could be used to limit competition from new entrants. Secondly, the Access Regime sets a cap on the price that a new entrant can be charged to set up a direct connection with another direct participant. The reforms allow ATM owners to recover their costs by charging a fee directly to the user of the ATM, rather than through an interchange fee. These arrangements have been brought into effect through an ATM Access Code, developed by industry.

In order to ensure that industry is able to comply with the Access Regime without breaching the TPA, an exemption under Section 51 of the TPA is required. Section 18A of the Payment Systems (Regulation) Act 1998 (PSRA) allows a regulation to be made providing such an exemption.

 

An exemption from the requirements of the TPA in no way reduces the regulation and oversight of competition in the payments system. The ATM system will continue to be regulated by the RBA whose legislative mandate under the PSRA includes promoting competition in the market for payment services, consistent with the overall stability of the financial system.

 

These Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.

 


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