Aussie credit regulations 'could be relaxed'

Relaxed Aussie credit regulations could shift power to the payment networks.

Aussie credit regulations have come under the microscope recently, with the result that they could soon be relaxed.

Both Visa and MasterCard have been negotiating on the legislation applied to Aussie credit providers by the Payments System Board, reports The Sheet.

The outcome of this is a likely shift of power from the regulators to the two networks through a voluntary set of undertakings.

However, article author Ian Rogers suggests that this could in effect leave the payments system constrained to the same extent as under the current regulations.

These were introduced in 2003 and required payment schemes to justify their fees by carrying out transparent cost studies.

Mr Rogers adds that their intent - and their ultimate effect - was to reduce interchange in Aussie credit cards.

The Payments System Board is responsible for setting policy that the Reserve Bank applies to payment systems, which should control risk while promoting the efficiency of the system itself.