Mini bank status not needed to join payment card schemes

Banking regulators will unwind one prop of the last decade's reform agenda for payments and once again leave it to credit card schemes to decide which entities can join.

On Friday, the Payments System Board of the Reserve Bank of Australia said it had decided in principle to vary the access regimes applying to the designated MasterCard and Visa systems in Australia and "to seek removal of the current specialist credit card institution framework, administered by the Australian Prudential Regulation Authority."

Only two entities ever jumped the compliance hurdle under the SCCI regime.

One was GE Capital, which was already a member of the card schemes using its US banking licence.

The other was Tyro Payments, the only genuine start-up.

One entity rumoured to be scouting to enter the Australian market is Square.

The RBA said last year that it was "aware of an increasing number of entities - often foreign corporations focusing on non-traditional products such as 'virtual cards' - ... [which had] an interest in undertaking credit card issuing or acquiring activities."

The RBA said then that both MasterCard and Visa "have expressed an inclination to accept a wider range of participants into their systems."

Two representative firms in the virtual cards space are Wrights Express (issuer of Motorcharge and Motorpass) and Blackhawk Network.