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Payments Regulation in Asia
KEY TAKEAWAYS • Limited Implementation by Regulators: Only Australia, one country of the four in scope, has active interchange caps for credit and debit transactions. While Japan had previously introduced an interchange cap of 3.25% on credit transactions, due to significant pushback from the credit card industry, lawmakers reversed their stance, allowing card companies the discretion to decide whether or not to uphold the cap. 10 India’s market has introduced interchange caps for debit and UPI-enabled transactions, but credit transactions remain uncapped. • Immediate Drop in Interchange Fees: In Australia, the market with the most robust public reporting on card fees, there was a precipitous drop in the average total merchant fees for Visa and Mastercard credit and debit rates. From Q3 to Q4 2003, Visa and Mastercard total merchant fees fell from 1.44% to 1.18%, the largest single drop in average rates quarter-over- quarter. By Q1 2004, average Visa and Mastercard rates reached 1.08% (Figure 1).
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
2003
2004
2005
American Express Credit
Diners Club Credit
eftpos Debit
Mastercard and Visa All
Figure 1. Australia Total Merchant Fees by Card Type (2003-2005)
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