Australian Competition Tribunal refuses to authorise zero interchange for EFTPOS

The Australian Competition Tribunal today released its decision refusing to authorise arrangements among Australian banks to reduce the interbank fees on EFTPOS transactions to zero.

This agreement was a pre-fixed agreement, and unless authorised, would be considered illegal under the Trade Practices Act. The Australian Competition and Consumer Commission had authorised the arrangement, but their decision was appealed by a group of merchants and subsequently upheld by the Tribunal.

When EFTPOS was being introduced into Australia, banks that issued debit cards tried to encourage merchants to invest in infrastructure to accept these cards by offering to pay the merchant’s bank a fee per transaction. These bilateral fees are known as interchange fees and have been criticised by the Reserve Bank of Australia. The Tribunal found that the proposed agreement was likely to have the effect of passing on to the general body of consumers an annual cost estimated to be AUSD 170 million. Frontier (Australia) was retained by solicitors for the merchants and gave evidence before the Tribunal.

For more information, please contact Marita O’Keeffe at or call on +61 (0)3 9620 4488.


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