The Reserve Bank of Australia proposes to impose an Access Regime under Section 12 of the Act on the participants in each of the three payment systems designated on 12 April 2001 by the Reserve Bank under Section 11 of the Act, being:

(i)      the credit card system operated within Australia known as the Bankcard Scheme;

(ii)     the credit card system operated within Australia known as the MasterCard system or the MasterCard network card system;

(iii)    the credit card system operated within Australia known as the VISA system or the VISA network card system.

The purpose of the Access Regime is to ensure that any restrictions imposed on participation in the designated credit card schemes do not inhibit competition any more than is necessary to protect the financial safety of the system. The Access Regime requires that the class of specialist credit card institutions supervised by the Australian Prudential Regulation Authority (APRA) be eligible to apply for membership in the designated credit card schemes on the same basis as other authorised deposit-taking institutions. The Access Regime also requires the removal of certain restrictions and penalties on the credit card acquiring activity of members.

The effect of the Access Regime will be to promote efficiency and competition in the provision of credit card payment services to merchants and cardholders by facilitating participation in the designated credit card schemes of institutions that specialise in credit card issuing, acquiring, or both, and that do not conduct other banking business.

Submissions on the proposed Access Regime, a copy of which is attached to this notice, should be made by 12 September 2003 to:

Acting Head of Payments Policy

Reserve Bank of Australia

GPO Box 3947

SYDNEY NSW 2001

There is no need to repeat submissions made in response to the earlier proposed Access Regime as those submissions will be considered.

Signed

IJ Macfarlane

Governor

Reserve Bank of Australia

2. This Access Regime applies to the credit card system operated within

Australia known as [ ] designated on 12 April 2001 by the

3. In this Access Regime:

an “acquirer” is a participant in the Scheme in Australia that provides

services to a merchant to allow the merchant to accept a credit card;

an acquirer is a “self acquirer” if it acquires transactions for which it or a

is the merchant;

“authorised deposit-taking institution” has the same meaning given to

“credit card” means a card issued under the rules of the Scheme that can

be used for purchasing goods or services on credit, or any other article

issued under the rules of the Scheme and commonly known as a credit card;

an “issuer” is a participant in the Scheme in Australia that issues credit

cards to the issuer’s customers;

“merchant” means a merchant in Australia that accepts a credit card for

payment for goods or services;

“rules of the Scheme” mean the constitution, rules, by-laws, procedures

and instruments of the Scheme as applied in Australia, and any other

arrangement relating to the Scheme by which participants in the Scheme

in Australia consider themselves bound;

a “specialist credit card institution” is an authorised deposit-taking

institution that engages in, or proposes to engage in, credit card issuing, credit

meaning in this Access Regime.

4. Each participant in the Scheme must do all things necessary on its part to

ensure compliance with this Access Regime.

5. If any part of this Access Regime is invalid, it is ineffective only to the

extent of such part without invalidating the remaining parts of this Access

Regime.

6. This Access Regime is to be interpreted:

• in accordance with its objective; and

• by looking beyond form to substance.

7. This Access Regime comes into force on [ ].

8. Any person who is an authorised deposit-taking institution is eligible to

apply to participate in the Scheme in Australia. Subject to paragraph 9,

any criteria may be applied by the Scheme in assessing applications for

participation in the Scheme in Australia.

9. Neither the rules of the Scheme nor any participant in the Scheme shall

discriminate between specialist credit card institutions as a class and other

authorised deposit-taking institutions as a class in relation to any of the

criteria applied in assessing applications for participation or in relation

to the rights and obligations of participants in the Scheme in Australia.

10. Neither the rules of the Scheme nor any participant in the Scheme shall

prevent a participant in the Scheme in Australia from being:

(i) an issuer only; or

(ii) an acquirer only; or

(iii) both an issuer and an acquirer.

11. Neither the rules of the Scheme nor any participant in the Scheme shall

impose on a participant in the Scheme in Australia any fee, charge, loading

or any form of penalty as a consequence of, or which is related in any

way to, that participant’s activity as an acquirer relative to its activity as

an issuer in the Scheme.

12. Neither the rules of the Scheme nor any participant in the Scheme shall

prohibit a participant in the Scheme in Australia from being a self acquirer

if the participant can reasonably establish in accordance with the rules of

the Scheme that, as a self acquirer, it has the capacity to meet the

obligations of an acquirer.

13. The administrator of the Scheme or a representative of the participants in

the Scheme in Australia must publish the criteria applied in assessing

applications for participation in the Scheme in Australia on the Scheme’s

website, or make such criteria generally available through other means as

soon as practicable after this Access Regime comes into force.

14. The administrator of the Scheme must provide to a person that has applied

to participate in the Scheme in Australia reasons in writing if the

application is rejected, as soon as practicable after such rejection.