RBA boots aimed at American Express
American Express will finally be roped into the net of interchange regulation in Australia, at least partially, if the Payments System Board proceeds with plans outlined yesterday.In a consultation paper likely to reflect final thinking on the subject, the Payments System Board flagged "extending interchange fee regulation to the companion card system [of American Express], the Debit MasterCard system and the prepaid card systems operated by Eftpos, MasterCard and Visa."The PSB, part of the Reserved Bank of Australia, said it concluded that "competition and efficiency in the payments system could be enhanced" by this and other measures.The consultation paper is a formal step to enacting new regulations and builds on a preliminary period of engagement with the industry this year.Other measures planned include "lowering the level of the weighted-average interchange fee cap for debit cards to eight cents per transaction and applying it jointly across the debit and prepaid cards of each scheme."The PSB also wants to tinker with the methodology for capping interchange fees, mostly in highly technical waysThis includes a shift to "quarterly compliance with weighted-average interchange fee benchmarks, with interchange fee rates 'reset' whenever average interchange fees exceed the regulated benchmark in a quarter" and a ban on use of faux interchange fees to evade existing rules.Companion cards, issued by banks, are more like conventional "four party" credit cards, but represent a minority of volume for American Express, who did not comment on this issue yesterday.