Sefiani client eftpos Payments Australia Limited (ePAL), the company established to manage the eftpos debit payments network, has announced a new multi-lateral interchange fee model for eftpos transactions, part of a package of measures to strengthen the competitiveness of the popular system.

The new fee model follows extensive consultation by ePAL with industry participants including financial institutions and retailers, and will support investment in enhancements to the eftpos network which will make it more secure, convenient and accessible for both retailers and consumers.

There is no charge by ePAL to consumers in the new eftpos interchange fee model.

The multi-lateral fee model is intended to replace the previous system of bilateral interchange fee arrangements struck between different participants in the eftpos payment network.

ePAL Managing Director, Bruce Mansfield said the company had determined a simple range of multi-lateral interchange fees: zero for charities, Medicare Easyclaim and low-value transactions below $15, and 5 cents for point-of-sale (POS) transactions of $15 or more.

“The new 5 cent interchange fee for standard POS transactions is less than half the equivalent fee of 12 cents payable for international scheme debit cards (Visa and MasterCard), which is at the top of the RBA-regulated range,” Mr Mansfield said.

“Our new multi-lateral interchange fees should be considered alongside the separate scheme fees that apply to both eftpos and international scheme debit cards. When the significantly cheaper eftpos scheme fee is factored in, eftpos transaction charges will be three to four times cheaper for retailers than international debit card transactions,” he said.

“The new multi-lateral model gives ePAL and its Members the confidence and funding necessary to invest in eftpos enhancements such as chip technology for state-of-the-art security, contactless payments that are quick and convenient, mobile and online payments.

“eftpos is now positioned to be an effective and low-cost competitor among Australia’s debit payment systems. This is good for retailers and good for consumers – a vibrant eftpos system will put downward pressure on the cost to retailers of processing card transactions,” Mr Mansfield said.

Interchange fees are payments made between the retailer’s bank or financial institution (known as the acquirer) and the eftpos cardholder’s bank or financial institution (known as the issuer).

The introduction of a new eftpos interchange fee model follows a decision by the Reserve Bank of Australia in November 2009 to recognise multi-lateral eftpos interchange fees, and to align the eftpos multi-lateral interchange fee standard with those for international scheme debit card interchange fees. The RBA has consistently expressed a desire to see stronger competition in the debit payments sector, to promote efficiency and the public interest.

The new multi-lateral interchange fee model will be effective from 1 October 2011. ePAL will work closely with financial institution and retail stakeholders to ensure a smooth transition to the new model.

“eftpos is the way Australians prefer to pay and be paid and it is critical that we invest in the system’s future. This is an historic milestone in Australia’s payments industry, so we are giving all stakeholders ample time to prepare and will be implementing the changes in a timely and open manner,” Mr Mansfield said.