Empty legal win for Aldi

Aldi Stores will get its costs paid by Eftpos Payments Australia Ltd for its largely empty victory in the Federal Court over media releases sent out by the latter that were more bombastic than misleading.

The reversal of Eftpos interchange, which from Sunday will be payable from the merchant's bank to the cardholders' bank on a minority of transactions, is a long-standing public policy goal of the payments regulator, the Payments System Board.

The PSB, assisted in the early days by the Australian Competition and Consumer Commission, has wrestled with the economics of cards' systems for more than 12 years.  The change addresses what it regards as the public policy issues arising from the previously opaque practice of establishing interchange fees between banks on card payments.

Since early on in the process, the PSB has expressed doubts over the historical direction of interchange payments on Eftpos in Australia, which appears to have its origins in efforts by the banks to induce merchants (starting with the oil companies in the mid-1980s) to take up the technology.

The most common arrangement around the world is that interchange fees are paid from the merchant's bank to the cardholder's bank, as is the case with credit cards in Australia.

The PSB nudged the industry towards a reversal of the fee flow, as well as a reduction in the level of the fee, over the course of the 2000s, and rewrote the regulations several years ago to cater to this shift.

The PSB and the Reserve Bank of Australia have also actively championed a revival of collaborative bank investment in Eftpos, including the formation of EPAL and the separate company Eftpos Access.

This history did not feature much in the court's speedy examination of Aldi's complaint, which itself ignored the deeper issues of market structure surrounding the "opting in" to multilateral Eftpos interchange.

There is talk of efforts by Aldi to interest the ACCC in the new interchange arrangements, and there is also talk of taking Aldi escalating its complaint through Treasury, the Government and Parliament.