Reserve Bank calls for greater choice of payment schemes

Consumers should be given more choice in how they make payments online, in order for debit cards and EFTPOS-style alternatives to become available to Australian internet customers, the Reserve Bank has suggested.

As part of a wide ranging report into the country's payments systems, the Reserve Bank stated that it would like to open up the options for consumers to pay with more than just credit cards - in a bid to cut down on the growing levels of personal debt in the country.

The Bank is concerned that EFTPOS - a system similar to debit cards - will wither away as banks promote credit cards instead of other options.

In a review of recent changes in the system, the Reserve's Payments System Board said it would be prepared to step back from regulating interchange fees charged by banks for the use of credit cards - but only if the industry stimulated its own competition.

It admitted, however, that the use of cheques as a form of payment is declining at such a rate that it was nearly impossible to revive the format.

A statement from the Bank said: "Competition would also be strengthened by allowing merchants to decline some credit cards if they judged the fees to be too high, while still accepting other cards issued by the same scheme.

"In addition, transparency could be further increased by the schemes publishing their average interchange fees and scheme fees.

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