MasterCard International has slammed proposals by the Reserve Bank of Australia (RBA) to regulate the credit card industry, claiming that the new rules would cost cardholders hundreds of millions of dollars in higher fees and charges.
The card association says the proposed reforms would make it more difficult for many consumers to get credit and lessen competition among credit card issuers to the disadvantage of small retailers and community banks.
The RBA proposals, unveiled on 14 December, 2001, challenge the basic tenets of the international payment card networks in the setting of interchange fees, surcharging, and who can join the system.
According to MasterCard, the only apparent winners would be large retailers, who not only stand to gain a windfall of $500 million annually, but also the right to surcharge cardholders for using credit cards.
Andre Sekulic, MasterCard's Asia-Pacific president says that if implemented the reforms would backfire to the disadvantage of the very groups they aim to help. In particular, he argues that the concept of transferring more of the cost of using credit cards from merchants to cardholders is contrary to the public interest. By the RBA's own calculation, those costs amounted to $500 million a year or more.
He states: "We strongly believe that the wider community has not had an opportunity to hear all sides of the debate thoroughly and as such we will be launching a major initiative to open up dialogue with these different groups, especially those we feel will be most disadvantaged by these changes."