Media Release Promoting Competition in the Debit Card Market

Mastercard and Visa have each given undertakings to the Reserve Bank that they will not engage in ‘tying conduct’ involving their debit and credit card products. The undertakings address the Bank’s concerns that the international schemes could engage in conduct that would limit competitive pressure in the debit card market, which has the potential to impose additional costs on the payments system. The Bank has published the undertakings to provide transparency about the commitments given by the international schemes.

Reserve Bank Deputy Governor Michele Bullock said, ‘The undertakings from Mastercard and Visa will support competition in the debit card market by ensuring the debit schemes compete solely on the basis of their debit card offerings.’

Compliance by Mastercard and Visa with the undertakings will be monitored through audits by external and independent auditors approved by the Bank, as well as an annual self-certification requirement.

Background

Following the October 2021 Conclusions Paper to the Review of Retail Payments Regulation the Bank sought voluntary undertakings from the international schemes that the schemes will not engage in ‘tying’ conduct by making preferential ‘strategic’ interchange rates on credit card transactions conditional or ‘tied’ on the value or volume of a merchant’s debit card transactions.

The Payments System Board of the Reserve Bank has a mandate to promote efficiency and competition in the payments system, and the overall stability of the financial system.