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Payments Regulation in Asia
Methodology and Country Profiles Executive Summary
In this section, each country will be described by its payments mix over time, split between ecommerce and POS transactions. What follows is a review of available payment card cost disclosures, either voluntary or regulated, and an analysis of publicly available country-level cost data. Here’s an overview of the report’s key findings: AUSTRALIA: • Payments Mix: As a result of explosive growth of card payments in the period 2010-2020, Australia has become one of the most developed card markets in the world, with over 70% of online transactions and 80% of POS payments taking place on card or digital wallet. Contactless payments, wherein the consumer taps their card against a POS terminal, rose 5x between 2016-2019, and now is one of the most popular methods of transacting in-store card payments. By 2022, digital wallets were the most popular payment method for ecommerce transactions, representing 31% of spending. It’s important to note, however, that a significant share of digital wallet spending may in fact represent card spending, as some of the most popular digital wallets in Australia utilize digital cards as the underlying payment method. According to Visa, these card types are typically referred to as pass-through wallets, and the payments mix analysis does not separate these payments from staged or stored-value wallets. 43 • Public Resources for Cost Analysis: The Reserve Bank of Australia has published monthly and quarterly statistics on cost of card payments by network since 2002. These metrics include total volume of spending by card type, network type, and channel. The bank publishes this data monthly and provides average card fees by card type, network type, channel, and geography. In addition, Visa and Mastercard publish interchange rates, pursuant to the RBA’s 2016 requirements on interchange transparency. • Price Trends: Following the enforcement of the 2003 interchange caps and surcharging rights, Visa and Mastercard cost of acceptance for Australian merchant fell from 1.45% to 1.08% in just one year. While American Express was exempt from the interchange caps, American Express fees have steadily fallen from 2.51% in Q1 2003 to 1.32% in Q4 2023. By Q2 2020, when the RBA began to report on Visa and Mastercard debit and credit fees separately, the average merchant fee for those networks was 0.62%, less than half the Q1 2003 value. Over the period Q3 2020 to Q4 2023, Visa and Mastercard credit rates had the highest increase, rising by 0.09% and 0.12% respectively. In that same period, eftpos merchant fees also increased by 0.09%, with average Eftpos merchant fees sitting at 0.35% by Q4 2023. In part, these increases can be explained by the introduction of new eftpos rates in 2022 for mobile transactions and higher spend in CNP channels, which typically cost more than in-store transactions and card not present transactions.
43 https://usa.visa.com/content/dam/VCOM/global/support-legal/documents/digital-wallet-guide-march-2023.pdf
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