over the past 10 years, the annual number of debit card transactions per person in australia has risen from around 80 to around 260. most debit cards in australia are dual - network cards. that is, payments made using these cards can be processed across two networks. the network brand on the front, and the most obvious, is typically an international scheme – mastercard or visa. on the back is usually the eftpos brand, the australian domestic debit system. the payments system board and the reserve bank have been supportive of these cards because they provide convenience and choice to both consumers and merchants. when dipping or swiping their card, consumers could choose the credit button to direct the transaction through the international scheme or the cheque / savings button to direct it through the eftpos system. merchants could also indicate to customers which network they would prefer to be used. so dual - network cards can play a role in keeping downward pressure on the costs of card acceptance to merchants ( and indirectly to consumers ). the move to contactless payments ( ‘ tap - and - go ’ ), however, has muted some of the competitive pressures that can come from dual - network cards. since eftpos moved to tap - and - go later than mastercard and visa, a substantial number of payments that were previously processed by the eftpos network are now being processed by the international schemes. while consumers would not have noticed anything different, businesses have seen their costs of card acceptance rise as processing through the international schemes is more expensive than eftpos. https : / / www. rba. gov. au / speeches / 2019 / sp - ag - 2019 - 05 - 16. html 7 / 8 5 / 16 / 2019 leaning in : towards better payment and clearing systems | speeches | rba the bank has attempted to ensure that merchants continue to have choice by obtaining commitments from banks to allow their merchant customers to choose the network through which contactless transactions are processed. some smaller acquirers – for example tyro and first data – have been faster than the major banks to provide their customers with this functionality. but the major banks are now offering or are about to offer merchant choice. this should assist in keeping downward pressure on the fees that merchants pay. but as payments move to different form factors, such as mobile phones or wearables, and new technologies are introduced, there is a risk that some may use it as an opportunity to lock out competitors. the

reserve bank is of the view that in moving to new technologies, merchants and consumers should continue to have a choice of debit card network. rules or policies of any scheme that have the effect of removing choice will reduce competition and result in rising costs to merchants. the bank will be looking closely at developments in the debit card market to ensure that, as far as possible, there is a level playing field for the alternative debit schemes. we will also work with the accc as necessary to identify and address any anti - competitive behaviour. in the specific case of least cost routing, we would not want to see the benefits to competition from this innovation thwarted by issuers taking eftpos off dual - network cards. conclusion competition is important in payments. it delivers better customer experiences, more convenience and innovative products. but as networks, collaboration is also often required. the development of the npp and recent work on addressing fraud in card payment systems are good examples of where participants that are normally competitors have cooperated to ultimately deliver better outcomes for australian consumers and merchants. these collaborative efforts, however, are not without their challenges. as the payments system regulator, the reserve bank remains willing to engage with industry and facilitate collaboration where this is in the public interest. © reserve bank of australia, 2001 – 2019. all rights reserved. https : / / www. rba. gov. au / speeches / 2019 / sp - ag - 2019 - 05 - 16. html 8 / 8