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20+ Major Aussie Retailers Did Dodgy Mastercard Deals: ACCC

Mastercard is being taken to court by the ACCC for allegedly engaging in anticompetitive conduct in the supply of debit card acceptance services.

Mastercard’s alleged conduct commenced in late 2017, and breached Reserve Bank of Australia’s least cost routing initiative, which aims to increase competition by allowing businesses to choose the lowest cost network to process their transactions.

The ACCC alleges Mastercard offered certain large merchants cheaper interchange rates for processing credit card payments if they agreed to process Mastercard-eftpos debit card payments through the Mastercard network.

The agreements gave these businesses discounted rates for Mastercard credit card transactions, meaning these businesses would not process significant debit card volumes through the eftpos network, despite eftpos often being the lowest cost provider.

The ACCC claims Mastercard did such deals with more than 20 major retail businesses. These include supermarkets, fast food chains and clothing retailers.

“We allege that Mastercard had substantial power in the market for the supply of credit card acceptance services, and that a substantial purpose of Mastercard’s conduct was to hinder the competitive process by deterring businesses from using eftpos for processing debit transactions,” ACCC Chair Gina Cass-Gottlieb said.

“We are concerned that Mastercard’s alleged conduct meant that businesses did not receive the full benefit of the increased competition that was intended to flow from the least cost routing initiative.”

“Reducing costs for businesses enables them to offer their customers better prices. Making sure the major card schemes, Mastercard, Visa and eftpos, compete vigorously is important for both those businesses and their customers.

“Promoting competition and investigating allegations of anti-competitive conduct in the financial services sector, with a focus on payment systems, is a priority for the ACCC. Financial service providers should be on notice that we will not hesitate to take action in response to concerns raised about anti-competitive conduct in this important sector of Australia’s economy.”

It will be interesting to see which Australian retailers are caught up in this scandal.


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