By Aimee Chanthadavong
Reserve Bank of Australia together with Australia’s three major debit card networks – eftpos, MasterCard and Visa – have come to a voluntary agreement over dual-network debit cards.
Dual-network debit cards are cards issued by banks and other financial institutions with point-of-sale debit functionality from two payment networks – MasterCard and Visa.
Previously, the Board supported this system because it was convenient for cardholders but it’s now concerned that when it comes to contactless payments the arrangement limits competition and consumer choice from choosing eftpos as an option.
“The outcome will safeguard the rights of Australian card-issuing banks and institutions to maintain existing dual-network arrangements in the contactless environment,” it said.
As part of the agreement, when an issuer wishes to include applications from two networks on the same card and chip, the networks have agreed to work constructively with the issuer to allow this. The networks have also agreed not to prevent merchants exercising choice in the networks they accept, in both the contact and contactless environments. In addition, the networks have agreed not to prevent merchants from exercising their own transaction routing priorities when there are two contactless debit applications on one card.
There has been all-round applaud from retailers and the payment networks as a result of this agreement.
Retailers will have a choice with payment network selection, especially for contactless transactions. Australian Retailers Association executive director Russell Zimmerman said it will be a chance for retailers to take advantage of the most efficient and cost effective transaction method for their business.
“The RBA’s decision will ensure that retailers can request that when a contactless debit card is used, the transaction can be routed via the eftpos, Visa or MasterCard network,” he said.
Both existing payment networks – Visa and MasterCard – have also said they are pleased with the outcome, which covers both contact and contactless cards.
“The agreement endorses Visa’s long standing position that we do allow the issuance of dual network debit cards,” Vipin Kalra, Visa Australia country manager, said.
“We’re pleased that it preserves Visa’s right to be the exclusive logo on the front of Visa cards and for Visa payWave to be the primary contactless payment application on all Visa payWave cards. “
Similarly, a MasterCard spokesperson said: “It guarantees consumers will continue to benefit from MasterCard's global acceptance network and local investments through functionality like PayPass contactless payments and other innovative payments solutions.”
But the real winner from all of this is eftpos. It will see new or replacement multi-network debit cards carry the eftpos function and logo.
“Multi-network cards were always designed to promote choice in payments, giving consumers the option to continue to access their own money using eftpos by pressing cheque or savings at the checkout if they wish,” Bruce Mansfield, eftpos managing director, said.