ACCC re-authorises BECS suspension and termination rules

The Australian Competition and Consumer Commission has renewed its authorisation of the suspension and termination provisions of the Bulk Electronic Clearing System.

BECS covers direct entry payments, allowing approved organisations (such as utilities) to make arrangements with their financial institutions to direct debit or direct credit large numbers of customer accounts on a regular basis.

Last year the system handled an average of 2.6 million direct debits worth A$19.9 billion and 5.3 million direct credits worth $24.3 billion each day.

The Australian Payments Clearing Association oversees BECS. Its management committee has the power to suspend a member for various reasons, including insolvency, a breach of obligations or upon request from a regulator. It may terminate a membership if a suspension event has occurred and has not been rectified.

The ACCC said exclusion from BECS would have an adverse effect on the financial institution concerned and could make it difficult for the institution to directly clear and settle bulk electronic low value transactions. This has the potential to result in anti-competitive detriment.

However, the ACCC accepted APCA's submission that the suspension and termination provisions of the BECS regulations are likely to result in public benefits through the protection of the security, efficiency and integrity of the system.

It said that without the ability of BECS members to self-enforce compliance with the standards established by APCA the operational efficiency of BECS could be undermined and the confidence of the system's participants could be reduced.

The ACCC said: "The suspension and termination provisions do not place unreasonable requirements on members and there are adequate checks and balances in the way they are employed.

"The likely benefit to the public would outweigh the likely detriment to the public."