37
Payments Regulation in Asia
The RBA reports that mobile transactions have more than tripled in-store since 2019, with around a third of all contactless payments made by mobile device, yet the fees on mobile debit are more than double the typical cost of a tap or insert transaction (Figure 12).
0.30%
0.25%
0.20%
0.15%
0.10%
0.05%
0.00%
Tap/insert card
Tap mobile
Online
Non-strategic merchants
Interchange Fees, December 2022
Scheme Fees, 2021/22
Figure 12. Average Merchant Fees by Presentation Method (2021-2022)
In addition, while Australia has interchange caps for the majority of all interchange fees, both credit and debit, the lack of fee restrictions on non-interchange fees like scheme fees still erode cost controls made with caps. The RBA estimates Australian merchants paid around $1.9 billion in net scheme fees from 2022 to 2023, up 43% from 2021 to 2022. This figure excludes issuer and acquirer rebates, with issuers receiving “generous rebates” on scheme fees and most of the burden of scheme fees falling on acquirers, “which then gets passed on as higher costs for merchants.” 72 The RBA’s announcement in 2022 of Least Cost Routing expectations for digital wallets comes as a timely tool for merchants to manage their costs in the modern day. The fact that these routing rights are not yet guaranteed for merchants explains some of the differentials presented in Figures 11 and 12. CMSPI estimates that almost $250 million of the $800 million in LCR savings could come from mobile wallets, and this share is only expected to grow with digital mobile routing enablement. 73
72
https://www.rba.gov.au/speeches/2024/sp-so-2024-06-18.html
73 https://cmspi.com/news/breaking-news-what-merchants-need-to-know-about-the-rbas-latest-payments-up- date/
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