Ann: Half Year Result Investor Presentation, page-34

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tomhagen

252 Posts.

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15/12/22

18:25

Post #: 65330887
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Originally posted by Klogg ↑

My current understanding is the issuer fees will drop if LCR is implemented for mobile transactions (as occured for other LCR enforcement)

This is the basic flow (which basically everyone here probably already knows)

In more detail: The Merchant Service fee is what is charged to provide the service. If the card scheme (issuer) fees are reduced, the overall fee can be reduced by the same amount (and the surcharge also reduced)
I've not come across any hard caps on fees or surcharges, but there is this in the RBA standard:
https://www.rba.gov.au/payments-and...s-relating-to-merchant-pricing-2021-11-18.pdf

Basically, the surcharge can be whatever it costs the merchant to provide the service. So long as the acquirers fee is not outrageous, the RBA isn't really going to regulate harder (at least that's my take).
That also means that enforcing LCR on mobile wallets will reduce the fee as a percentage of the total (and reduce overall cost of txn for customers), whilst allowing acquirers to maintain their fees.

Happy to be corrected on any of the above.

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I think we’re saying the same thing. That is, if the payment processing fees are not compressed, then there will be no impact to SMP. Visa/MasterCard and card issuers (ie banks) are the obvious losers with LCR and merchants/consumers the winner.

I used the wrong words previously around “surcharge caps” - I meant the regulation that came in few years ago to stop merchants from price gouging on the surcharge fee.

SMP Price at posting: $1.04 Sentiment: None Disclosure: Held
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0 Great analysis

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