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Payments Regulation in Asia
Japan – Network rules apply in Japan. From an interview conducted with network representatives, providing discounts for cash payments may be in violation of JCB’s member store terms and conditions while Visa’s rules do not restrict member stores. However, network rules do not currently cover all use cases of discounting. For example, networks have indicated a case-by-case evaluation in the event a store provides alternative incentives for customers, such as additional store points when customers pay with cash. 20 Case Study: Surcharging in Australia The RBA found that the 2003 payments reforms including surcharging and interchange cap had the desired effect on the payment landscape – consumers became more conscious of price signaling by avoiding surcharges when possible and the cost of card acceptance steadily decreased in the following years (Figure 1). 21 In 2016 restrictions against ‘no-surcharging’ rules have been expanded to include other payment methods such as eftpos, American Express, Diners Club, UnionPay, and PayPal. 22 Immediately following the enforcement of the 2003 interchange caps, there was a sharp decline in Mastercard and Visa average cost of acceptance in Australia. Following implementation of interchange caps and surcharging laws, the cost of accepting American Express cards, exempt from the interchange regulations, also fell from above 2.5% to below 1.5% over a 15-year period. At this time, merchants had a greater incentive to dissuade the use of unregulated cards as a result of the interchange caps on Visa and Mastercard and had greater access to pricing controls with new surcharging rights for American Express credit cards. The RBA is a strong proponent of a merchant’s right to surcharge “for payments system efficiency and… to hold down the cost of goods and services to consumers generally.” 23 However, since the percentage of merchants surcharging in Australia has increased, there have been concerns of excessive card surcharging. In response to these concerns, the RBA issued new surcharging and interchange standards for large and small merchants in 2016 and 2017, respectively. This new regulation defines the meaning of a “permitted cost of acceptance” and ensures cards will not be surcharged in excess of a merchant’s cost of acceptance for that card system. 24 The central government has since banned the practice of excessive surcharging and provided the ACCC enforcement powers on this matter.
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https://topics.smt.docomo.ne.jp/article/otonanswer/life/otonanswer-162245?redirect=1
21 https://www.rba.gov.au/payments-and-infrastructure/review-of-retail-payments-regulation/pdf/review-of-retail-pay- ments-regulation-issues-paper-nov-2019.pdf 22 Ibid 23 https://www.rba.gov.au/payments-and-infrastructure/review-of-retail-payments-regulation/pdf/review-of-retail-pay- ments-regulation-issues-paper-nov-2019.pdf 24 Ibid
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