Excerpt from RBA payment fee reform paper out in April; the RBA...

Excerpt from RBA payment fee reform paper out in April; the RBA will impose its will by Aug if the industry cant organise itself earlier.
FYI
The ATM system
58. The Bank has taken an interest in ATM interchange fees, pricing regimes and access since the
time of the Joint Study. The Study noted that while the cost of providing a cash withdrawal
averaged around $0.50, interchange fees averaged around $1.00 and foreign fees charged
by financial institutions when their customers withdrew cash from another institution’s
ATM averaged around $1.35. Furthermore, there appeared to be no competitive pressures
driving prices closer to costs. Since that time, foreign fees have increased further with a
number of institutions now charging $2.00 per transaction despite there being no change
in interchange fees.
59. In the Joint Study, the Bank suggested that direct charging could be an alternative to the
current arrangements that could introduce more competition into the provision of foreign
ATM services. Since then, participants in the ATM industry have had a number of attempts
at designing alternative arrangements. During that process, the Bank has not sought to
regulate to impose a particular solution, but has emphasised the importance of improved
access, of ensuring that negotiations over interchange fees do not restrict access, and of
allowing ATM owners that wish to direct charge the ability to do so. The industry is
currently discussing with the Bank its plans for dealing with these issues.