Australian banks aren't interested in safer alternatives to Visa and Mastercard for online payments
Australia’s major banks aren’t interested in a safer, EFTPOS-based system for online payments.
They prefer to lock online shoppers and merchants into the riskier, more expensive (and profitable) global schemes of the US credit-card companies, Visa and Mastercard.
That is abundantly clear from an online payments discussion paper released last week by the Australian Payments Clearing Association.
Titled ‘Online Payments - Whats Next?’ the paper is just eleven pages long, contains little if any new information, and overall makes it abundantly clear that APCA had little
enthusiasm for the task of preparing and publishing the paper.
“The Australian consumer online payments marketplace is already competitive” states the executive summary.
An appendix does specify industry requirements for an alternative online payments service, but the paper’s conclusion makes it clear that APCA doesn’t believe such a new service could succeed.
“It is hard to see how the service will overcome the network effect challenge and reach critical mass.”
There are other indicators, too, that APCA (or more accurately APCA’s membership, which is dominated by the big four banks) has little interest in an alternative online payments system.
It isn’t until the second last page that APCA makes it clear that the paper has been produced as part of a proposed Reserve Bank deal for interchange fee de-regulation.
“In its Conclusions to the 2007/2008 Review of Reforms of Australia’s Payments System, the RBA listed development of an alternative online payment system as a pre-condition for
stepping back from existing multilateral interchange fee regulation applying to Visa and Mastercard.”
Of course, the Netherlands, with its hugely popular and successful IDEAL system, provides a clear and viable model for a nationally based online payments alternative to a system dominated by the two American card giants.
However the APCA paper appears to dismiss it entirely on the grounds that, in the European Union, shopping online from local merchants is more popular than online shopping from international merchants.
“The European Union has recently concluded that whilst online shopping in the EU is increasingly popular, cross-border activity in the EU is running at much lower levels than domestic eCommerce.”
For more information go to
www.apca.com.au
Share this article?
Use these links to share this story with friends via social bookmarking sites.
| 
