Central bank proposals to slash interchange fees for eftpos and card payment transactions in Australia have been decried as a "dog's breakfast" by the country's major credit union body.
The Reserve Bank of Australia reforms are designed to sweep away distortions in interchange fee levels across different payment media and steer more transactions to cheaper Eftpos schemes.
Under current interchange fees, cardholders face higher effective prices for Eftpos transactions than they do for Visa debit or credit card transactions, even though the Eftpos system is cheaper to operate.
The RBA proposals would slash eftpos interchange fees by 15 cents to five cents, and Visa debit fees by 25 cents to 15 cents.
In a statment, the RBA says: "The Bank is of the view that it is in the public interest for the various payment methods, including Visa Debit, to compete on their own merits, rather than on the basis of interchange fees that are subject to limited competition."
The RBA is also proposing the abolition of rules requiring merchants to accept both Visa debit and credit cards at the point-of-sale.
The Reserve Bank has called for submissions on the proposed standards by 29 April.
Credit Union Services Corporation of Australia (Cuscal) immediately slammed the reforms as "bad news" for credit unions and debit cardholders.
Cuscal chief executive officer John Gilbert said a consistent approach to regulating payments systems was needed rather than the promotion of credit cards by the central bank.
"Payments reform is a dog's breakfast and the biggest losers are Visa debit cardholders and smaller approved deposit-taking institutions such as credit unions," he claims.