With more start-ups looking to shake up the payments systems landscape, the Australian Competition and Consumer Commission (ACCC) has noted it will be keeping a watchful eye on the rapidly innovating space.
“Competition in payments markets, investigating allegations of anti-competitive conduct, and protecting the interests of consumers will be the focus of the ACCC’s financial services enforcement and policy work over the next year,” ACCC chair Gina Cass-Gottlieb stated in her recent address to the Australian Financial Review Banking Summit.
“Payment systems, services and competitors are rapidly evolving. We are committed to promoting and protecting competition in this important sector, particularly in the face of these rapid developments, and will take strong action to address any anti-competitive behaviour,” she said.
The regulator noted that some major players in the field had turned to increasingly aggressive tactics in the face of more players coming onto the market and said it would be proactive in protecting a healthy competitive environment.
“We are committed to supporting the government’s consideration of competition issues and working with the government to ensure that the regulatory framework for payments is designed to facilitate dynamic and innovative markets and good consumer outcomes,” Ms Cass-Gottlieb said.
The speech came on the heels of the ACCC’s action against Mastercard for allegedly engaging in anti-competitive conduct in order to discourage competition in the supply of debit card acceptance services.
The ACCC alleges that Mastercard made agreements with more than 20 major retailers to provide discounted rates for businesses on Mastercard transactions if the business was willing to process all or most of their Mastercard-eftpos debit card transactions through Mastercard rather than the eftpos network – subverting the government’s least-cost routing initiative.
“We allege that Mastercard had substantial power in the market for the supply of credit card acceptance services, and that a substantial purpose of Mastercard’s conduct was to hinder the competitive process by deterring businesses from taking advantage of least cost routing to use eftpos for processing debit transactions,” Ms Cass-Gottlieb said.
She added that the regulator’s actions showed their commitment to protecting the space.
“Our case against Mastercard highlights that the ACCC will be vigilant about attempts to reduce the impact of regulatory reforms designed to enhance competition – in this case, the Reserve Bank’s ‘least cost routing’ initiatives,” she said.
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Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.