The Reserve Bank of Australia’s Head of Payments Policy has delivered a speech on policy issues facing online retail payments .

The speech noted the Government’s plans to modernise the Payment Systems (Regulation) Act 1998 to deal with new business models and technologies emerging, particularly in online retail payments as well as the Reserve Bank’s proposed review of retail payments regulation. Background.

The speech focussed on:

• The cost of card payments for end users, particularly trends in scheme fees and international card transaction costs.
• How the least-cost routing of online debit card transactions can help lower merchant costs.
• Promoting competition for payment services on e-commerce platforms.
• Introducing more standardisation for tokenisation in online card payments.

In respect of Buy Now Pay Later the speech noted that while BNPL services offer benefits to consumers, they are typically an expensive way for merchants to accept payments as most BNPL services do not allow merchants to pass on the cost to consumers through surcharging.

After the reforms to the PSRA, the RBA plans to revisit this issue as part of a broader review of whether the RBA’s surcharging framework remains fit for purpose.

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