Payments using mobile wallets such as Apple Pay and Google pay reached 39 per cent of card transactions in the June quarter 2024, the annual report of the Payments System Board shows.
Nearly half of all card transactions are soon expected to be made via a mobile device in Australia a Cap Gemini report forecast recently.
The PSB’s data was released on the same day Australian Payments Plus announced the rollout of Merchant Choice Routing on transactions made via mobile wallets has commenced, meaning that merchants can chooseto have more payments routed via the lower cost Eftpos network.
Merchant Choice Routing is the new industry lingo for Least Cost Routing, something at which banks and payments providers overall have had a lousy record.
AP+, meanwhile, said Eftpos now has around a 35 per cent share of all debit card payments made online, after only being widely present in this segment for just over two years.
The Payments System Board for its part, said it considered that several practices relating to the provision of mobile wallet services “could have an impact on competition, efficiency and safety in the payments system.”
The issues include:
• transparency of fees charged to issuers by mobile wallet providers
• ability of issuers to pass on those fees to customers
• access by competitors to the digital ecosystems that facilitate mobile wallet transactions (including access to ‘near-field communication’ technology).
In commentary on the now hot debate over surcharging card payments the PSB said “ongoing monitoring of the surcharging framework suggests that issuers, acquirers, payment facilitators and card schemes are adequately discharging their obligations to provide relevant disclosures to help merchants surcharge appropriately.
“The RBA will consider whether formal regulatory intervention is required to address these issues as part of the Review of Retail Payments Regulation once the reforms to the Payment Systems (Regulation) Act 1998 (PSRA) are implemented.”
On MCR (formerly LCR) the PSB made clear: “To promote competition in the debit card market, a key focus for the RBA has continued to be encouraging widespread issuance of dual-network debit cards and greater availability and adoption of least-cost routing.
“This includes the extension of LCR availability to mobile wallet and online transactions, as adoption by consumers of these payment methods for debit card transactions continues to grow” which of course AP+ announced yesterday.
In June 2024, large providers had enabled LCR for 70 per cent of their merchant customers for in-person transactions, the PSB said.
“For online transactions, six out of 12 providers had made LCR available to all of their merchants.
As part of the upcoming Review of Retail Payments Regulation, the RBA will seek stakeholder views on the effectiveness of MCR/LCR and whether further regulatory intervention is appropriate.