Why the Reserve Bank isn’t the right regulator for our payments system (The Conversation)

Sometimes boring debates are important. Mind numbing detail gets in the way of good policy. So it is with an obscure feature of credit cards known as “interchange fees”.

At the moment these fees are both highly regulated, and inappropriately regulated by the Reserve Bank of Australia (RBA) and not the Australian Consumer and Competition Commission (ACCC).

People tend to overlook the complexity of the market economy. It seems all so easy. People trade goods and services all the time. The Payments System is how we actually pay for things. It isn’t simply a matter of handing over cash - the Payments System is a complex technological infrastructure, a web of interconnections and protocols between consumers, merchants, and banks. Cash makes up a part of that system but most of it runs on payments technologies that include debit cards, eftpos, and credit cards.

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