“Further regulatory intervention” in the arena of debit payments is on the cards, and probably certain, with the Reserve Bank venting more frustration over the roll out of least-cost routing.
“The RBA remains strongly supportive of merchants having the ability to choose their preferred debit card network through least-cost routing” the RBA said following the quarterly meeting of the Payments System Board yesterday.
The RBA has published LCR reporting from large providers for end June 2024, which shows that 70 per cent of their merchant customers had LCR enabled for in-person transactions.
For online transactions, 6 out of 12 providers have made LCR available to all of their merchants.
“While progress has been made over the past year, some providers still have much more work to do” the PSB said.
“As part of the upcoming Review of Retail Payments Regulation, the RBA will seek stakeholder views on the effectiveness of LCR and whether further regulatory intervention is appropriate.
“In the meantime, the Board expects providers to continue enabling LCR for in-person transactions for merchants that could benefit from it and pass the savings on to merchants.
“The Board also expects providers, including payment gateways, to accelerate progress on making LCR widely available for online transactions and enabling LCR for merchants that could benefit from it. T
“The Board continues to expect the industry to deliver LCR functionality for mobile-wallet transactions by the end of 2024.”