Australia’s central bank could use its regulatory powers to reduce the cost of electronic payments for merchants and consumers as the coronavirus pandemic makes people wary of using cash, Assistant Governor Michele Bullock said on Wednesday.
The Reserve Bank of Australia (RBA) is conducting a review of retail payments regulation in the country with a focus on the cost and resilience of electronic payments and access to cash.
Bullock said ATM withdrawals in April were down 30% from March and more than 40% from a year earlier as customers switched to contactless payments.
That has led to cost increases for some merchants when debit card payments are automatically routed through international schemes, Bullock said.
“So far, the bank has not mandated that acquirers explicitly offer least-cost routing to all their merchants but it remains an option that will be considered in the review,” she said in a speech titled Panic, Pandemic and Payment Preferences.
The review would look at how transparency of the payment plans offered to merchants could be improved.
“Ultimately though, if market forces are not generating competition to lower the cost of debit card payments, we may need to consider lowering the benchmarks that serve as a cap on average interchange fees,” Bullock said.
Bullock also said the reduced use of cash was making industry considerations of consolidating ATM networks “more urgent.”
“I expect that there will be action on this issue more quickly now,” she said.