Mastercard emerges as key backer of international body behind anti-RBA campaign

MastercardMastercard has conceded it is one of the international backers of an US-based organisation which is opposing the Reserve Bank of Australia’s plans to remove the Eftpos interchange fees.

The financial global giant told Mumbrella it has “contributed” to the efforts of the International Alliance for Electronic Payments (IAEP) which is spearheading the ‘Don’t Change my Interchange’ campaign.

Mastercard said it was “supportive” of the campaign which paints a grim picture of higher prices and reduced benefits for consumers if the RBA’s proposal to ditch the Interchange fee is ratified.

The fee is paid by businesses so they can accept credit card and debit payments.

While Mastercard admitted its involvement with the IAEP, it stressed it did not control the campaign, which has been described as “shadowy” by consumer lobby group Choice for its lack of transparency on who was behind it.

“We have seen the campaign and we are supportive of the efforts of the IAEP as they continue to campaign for consumers who have been negatively affected by interchange regulation – both in Australia and overseas,” Mastercard Australia SVP and country manager Andrew Cartwright said.

“MasterCard has contributed to IAEP to support their work on behalf of consumers and SMEs globally. But this campaign by IAEP is in no way controlled by MasterCard.”

The statement comes after Visa and Eftpos yesterday distanced themselves from the campaign which has been released to coincide with the RBA’s review of the regulatory framework for card payments.

The review follows a recommendation in the final report of the Financial System Inquiry that the Payments System Board consider a range of measures related to card payments regulation, particularly in relation to interchange fees and surcharging.

While the RBA declined to comment directly on the issue, it did point Mumbrella to the public submissions on its website.

Both Mastercard and Visa, along with the Australian Bankers’ Association, the Commonwealth Bank, Efptos, Westpac and Qantas, have made submissions to the RBA on the reforms.

In its submission Mastercard says:

“In principle, Mastercard contends that the regulation of fees in the Australian payments system has not achieved the intended outcomes. Evidence, both from Australia and similar jurisdictions, shows regulatory efforts to artificially lower interchange rates does not lead to lower prices for consumers. Indeed, it is more likely to lead to higher prices. The cost of regulatory compliance for most of the stakeholders may also be significant and can potentially stifle innovation in the industry.”

It is not the first time Mastercard has fought regulatory changes proposed by the RBA. In 2001, both Mastercard and Visa fought the RBA’s review of payment system reforms, including the regulation of the interchange fee.

Mastercard has said it will “continue to work with the Government and the RBA on any proposed changes to the regulations”.

The campaign’s website has been registered to FTI Consulting, who are listed as a lobbyist on the Government website and lists Mastercard as one of its clients.

IAEP is a little-known body headquartered in Alpharetta, Georgia, a town with a population of 57,000. The group is also behind a campaign in Europe called My Card Matters which on its website asks consumers: “do you want regulation to get between you and your credit card”.

Steve Jones and Miranda Ward


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