Explanatory Memorandum
(Circulated by the authority of the Assistant Treasurer and Minister for Financial Services and Superannuation, the Hon Bill Shorten MP)Chapter 3 Amendments to the payments system
Outline of chapter
3.1 Schedule 2 of the Bill contains amendments to the Payment System Regulation Act 1998 (PSRA) to provide ongoing protection for payment system participants, from Part IV of the Competition and Consumer Act 2010 (CCA), when complying with the ATM Access regime as determined by the Reserve Bank of Australia.
Context of amendments
3.2 The PSRA provides the Reserve Bank of Australia (RBA) with a mandate for promoting competition and efficiency in the payments system.
3.3 The networked nature of the payments system industry means there is potential for payment system participants to be in conflict with the competition provisions of Part IV of the CCA when they are complying with RBA regulations. This is because a degree of collaboration between payment system participants is required to meet the regulations.
3.4 The RBA has put in place reforms to promote competition and efficiency in the Australian ATM system. These reforms are part of a broader suite of reforms undertaken by the RBA since 2004 which are designed to promote competition and efficiency in the payments system by putting in place transparent pricing and improving ease of access into the ATM system.
3.5 On 23 February 2009, following extensive consultation and discussion, the RBA imposed an access regime on the ATM system that, among other things, prohibited the payment of interchange fees between participants in the ATM system. The networked nature of the payments system industry means that regulation, whether on the part of industry or the RBA, could require participants to undertake collaborative action that could result in a contravention of the CCA. These actions could include price setting, or making arrangements around access to the payments system concerned.
3.6 The Payment Systems (Regulation) Regulations 2006 were amended on 13 March 2009 to protect participants in the ATM system from prosecution under the CCA with respect to activities they undertake in compliance with the ATM Access Regime. This protection sunsets in March 2011 as regulations made for the purposes of section 51(1)(a)(ii) of the CCA last for two years.
3.7 To allow ATM participants to continue to comply with the RBA's ATM reforms after the current regulations sunsets in March 2011, a legislative change to the PSRA is required.
Summary of new law
3.8 Schedule 2 of the Bill amends the Payment System Regulation Act 1998 to :
- •
- provide protection for payment system participants, from Part IV of the CCA when complying with the ATM Access Regime as determined by the RBA.
Comparison of key features of new law and current law
| New law | Current law |
| Payment system participants will be permanently exempt from Part IV of the CCA through an Act rather than regulation. | Regulation 6 of the Payment Systems (Regulation) Regulations 2006 . |
Detailed explanation of new law
3.9 The Bill amends the PSRA to provide that for the purposes of subparagraph 51(1)(a)(i) of the CCA, anything that is done by a payment system participant in accordance with an access regime as determined by the RBA is exempt from the application of Part IV of the CCA. [Schedule 2, item 1, subsection 15(A ) of the Payment System Regulation Act 1998]