Introduction
This briefing considers the background to and impacts of the interchange developments in Australia. It then considers how competitors have reacted to the changes and the implications for the Australian market. The third chapter of the report considers how overseas competitors can learn from strategies employed by their Australian counterparts as they too face up to interchange reforms.
Scope of this report
- Covers credit card, EFTPOS, Visa Debit and ATM interchange
- Focuses on interchange in Australia with coverage of interchange developments in the UK, Europe and the US
Research and analysis highlights
As the interchange reforms have cut revenues from transactors the challenge for Australian issuers is to encourage more cardholders to revolve a balance. Increasingly, introductory offers are being used for this purpose in the hope that cardholders will continue to revolve a balance beyond the end of the introductory period.
Loyalty scheme cut backs have been the most dramatic impact of the Australian interchange reforms. As a cardholder it is now simply not possible to enjoy the same loyalty benefits as could be enjoyed prior to the reforms without incurring a higher annual fee and in some cases applying for an additional card.
There is a lesson for overseas regulators in the Australian example. It must be anticipated that affected parties will try to find ways round regulations even if doing so means entering 'grey' areas of what should and should not be regulated.
Key reasons to read this report
- Learn about the impacts of interchange reforms on the Australian market
- Identify responses to interchange reforms for different payments stakeholders
- Examine the impact of interchange reforms on consumers' card preferences
This briefing considers the background to and impacts of the interchange developments in Australia. It then considers how competitors have reacted to the changes and the implications for the Australian market. 