Interchange regulation didn't work in Australia the first time — or anywhere else for that matter.

The Evolution of Payment Costs in Australia

CLAIM

Interchange fees help deliver increased sales for businesses.

VALIDATION

Interchange fees help deliver increased sales for merchants and credit card sales at large merchants are on average about three times as large as cash transactions.

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Regulatory Intervention in the Payment Card Industry by the Reserve Bank of Australia – Analysis of the Evidence

CLAIM

Consumers saw no reduction in prices from merchants, but watched the cost of card fees in Australia increase by up to 50 percent.

VALIDATION

On average, the annual fees for standard four-party credit cards increased by 22% between 2001 and 2004, while annual fees for rewards cards increased by 47%-77%.

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Regulatory Intervention in the Payment Card Industry by the Reserve Bank of Australia – Analysis of the Evidence

CLAIM

Cardholders are paying approximately AU$480m each year in additional fees as a result of the RBA's regulation in 2003 – that's nearly AU$6 billion!

VALIDATION

Data provided by the RBA imply that cardholders in Australia are paying approximately AU$480 million each year in additional fees to issuing banks for Visa and MasterCard credit cards as a result of the RBA’s regulations. At the same time, card benefits have been reduced significantly. Thus, holders of credit cards are now paying higher fees and receiving lower card benefits.

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Research on interchange has been done all over the world and the evidence proves capping fees does not benefit consumers. Don’t just take our word for it. Do the research.

INTERCHANGE STUDIES AND REPORTS

Regulatory intervention in the payment card industry by the Reserve Bank of Australia
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ICLE Financial Regulatory Program White Paper Series
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The Evolution of Payment Costs in Australia
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Credit Losses at Australian Banks: 1980-2013
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Reserve Bank of Australia Credit and Charge Card Statistics – C1
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Interchange: Facilitating Benefits to Cardholders, Merchants and Society
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The Personal Credit Card Market in Australia: Pricing over the Past Decade
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The Economic Impact of Interchange Fee Regulation
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Review of Card Payments Regulation
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Evaluating the Impact of the Payment System Reforms
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Customer Owned Banking Association
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The Effects of the Mandatory Decrease of Interchange Fees in Spain
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