The Australian Debit Card Market: Default Settings and Tokenisation – Conclusions Paper

Summary:

The Reserve Bank of Australia (RBA) has released a Conclusions Paper outlining the outcomes of its public consultation on enhancing the competitiveness, efficiency, and safety of Australia's debit card market. The key conclusions are:

The RBA will not prohibit the setting of default routing networks on dual-network debit cards (DNDCs) due to the expected costs and risks involved.
The RBA remains supportive of merchants' ability to choose their preferred debit card network through least-cost routing (LCR) and expects providers to make faster progress in enabling LCR for merchants.
If providers do not make substantial progress in enabling LCR for more merchants by June 2024, the RBA will consider imposing a formal regulatory requirement.
The RBA expects the industry to implement new form factors in a way that is compatible with LCR from the outset.
* The RBA plans to publish high-level expectations on the tokenisation of payment cards by the end of 2023 to improve security, efficiency, and competition for online card payments.

These conclusions aim to enhance the overall competitiveness and safety of Australia's debit card market.