REPORT FINDS RESERVE BANK WRONG ON CREDIT CARD INTERCHANGE FEES

The Australian Taxpayers’ Alliance and the International Alliance for Electronic Payments today launched a new academic report Australian Interchange Fee Regulation: A Regulation in Search of Market Failure which highlights there is no theoretical basis for regulation of interchange fees by the Reserve Bank (RBA).

Launching the report at a special briefing in Parliament House, Canberra, the Chairman of the International Alliance for Electronic Payments, Iain Murray said that it is time to end the Reserve Bank’ secrecy into further regulation of interchange fees in Australia which hurts Australian consumers, businesses and cardholders.

“This report clearly shows that RBA credit card regulatory interventions were based on wishful thinking and anti-bank prejudice. The RBA has added costs to consumers but few, if any, benefits and should be reversed, Mr Murray said.

“This report shines a light on the RBA and its previously failed actions.  It acts as a warning against any further regulation by the RBA’s Payments Board, said Mr Murray.

The report was prepared by two of Australian economists Sinclair Davidson and Jason Potts; both are Professors in the School of Economics, Finance and Marketing at RMIT University.

We now know that they got it wrong and we know why they got it wrong, said Professor Sinclair Davidson at the launch.

“No serious market failure has been identified by the RBA, what is more there is no theoretical basis for regulation of interchange fees”, Professor Davidson concluded.

ABOUT:­ The Australian Taxpayers’ Alliance is a grassroots advocacy and activist organisation comprising of over 25,000 members dedicated to representing taxpayers and opposing over-regulation.

The International Alliance for Electronic Payments (IAEP) is a coalition of international free-market organisations who are concerned about the negative impact regulating interchange fees will have on the poor, consumers, small community lending institutions and the economy as a whole.

Media Contact:      Tim Andrews (m) 0434064934 (e) tandrews@taxpayers.org.au

The report may be downloaded in full HERE.

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