Document ID: chunk:federal_register_of_legislation:F2009C00144:body:0:p2
Version: federal_register_of_legislation:F2009C00144
Segment Type: other
Provision Reference: 
Character Range: 2572–5415

Australia;

 'rules of a Scheme' mean the constitution, rules, by-laws, procedures and instruments of the relevant Scheme as applied in Australia, and any other arrangement relating to the Scheme by which participants in that Scheme in Australia consider themselves bound;

 terms defined in the Payment Systems (Regulation) Act 1998 have the same meaning in this Standard.

4. This Standard refers to wholesale fees, known as 'interchange' fees, which are payable by an acquirer, directly or indirectly, to an issuer in relation to credit card transactions in a Scheme.

5. Each participant in a Scheme must do all things necessary on its part to ensure compliance with this Standard.

6. If any part of this Standard is invalid, it is ineffective only to the extent of such part without invalidating the remaining parts of this Standard.

7. This Standard is to be interpreted:

• in accordance with its objective; and

• by looking beyond form to substance.

8. This Standard comes into force on 1 July 2006.

9. This Standard replaces Standard No. 1, The Setting of Wholesale ('Interchange') Fees which applies to each Scheme.

Transition provision

10. If, prior to 1 November 2006, any interchange fee is introduced, varied, or removed in a Scheme, the average of interchange fees implemented in that Scheme in Australia on the date of that change, calculated in accordance with paragraph 20 below, must not exceed the benchmark for that Scheme calculated under Standard No. 1, The Setting of Wholesale ('Interchange') Fees.

Interchange fees

11. From 1 November 2006, on each of the dates specified in paragraph 12, the average of interchange fees implemented in a Scheme in Australia, calculated in accordance with paragraph 20 below, must not exceed the common cost-based benchmark calculated in accordance with paragraphs 13 to 17 below.

12. For the purposes of paragraph 11, the dates are:

(i) 1 November 2006 and 1 November of each third year thereafter; and

(ii) the date any interchange fee is introduced, varied, or removed in that Scheme.

Methodology

13. The cost-based measure for each Scheme is calculated as the value of eligible costs of the nominated Scheme participants in that Scheme for the financial year prior to the date by which the cost-based measure must be provided to the Reserve Bank of Australia, divided by the value of credit card transactions for the same period undertaken using credit cards issued by those nominated Scheme participants, expressed as a percentage. Eligible costs are:

(i) issuers' costs incurred principally in processing credit card transactions, including the costs of receiving, verifying, reconciling and settling such transactions;

(ii) issuers' costs incurred principally in respect of fraud and fraud prevention in connection with credit card transactions;

(iii) issuers'