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Payments Regulation in Asia
KEY TAKEAWAYS • Domestic Networks Exist Across All Markets: Every market operates at least one domestic network. In Australia, the domestic debit network eftpos is on average 15 basis points cheaper per transaction than Visa and Mastercard debit. • Limited Regulation of Mandated Co-Badging: Only Australia, one of four countries analyzed, regulates debit card co-badging by setting expectations for issuers and processors to facilitate least-cost routing. In addition, there is a higher interchange cap for dual-network badged cards than single-network badged cards, creating an incentive for issuers to ensure at least two networks are available on the card for routing. • Merchant Fees for Domestic Debit Transactions on Average Lower Than Global: Over the period Q2 2020 to Q4 2023, Visa and Mastercard average total merchant fees ranged from 0.47-0.54%, while in this period eftpos rates ranged from 0.26-0.35%. In any given quarter between Q2 2020 and Q4 2023, the Visa and Mastercard total merchant fees were between 42-89% higher than eftpos rates. While co-badging may not directly contribute to the lower rates for domestic debit networks, a mandate for issuers to co-badge cards grants merchants access to lower cost networks.
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