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ACCC Gives Thumbs Up To Big Payments Merger

The ACCC has greenlit a massive merger between Australia’s three largest payment systems providers: eftpos, BPay, and NPPA.

The competition watchdog has accepted a court-enforceable undertaking offered by the trio, which – among other promises – pledges to make available and promote least cost routing (which allows merchants to choose the payment system that processes transactions for dual-network cards) through eftpos for four years; create an industry standard for payments through QR codes by the end of June next year; and develop and make available a number of services including fraud prevention systems.

According to chair Rod Sims, the ACCC does not believe the merger will substantially lessen competition in the payments market, and that their services are largely complementary rather than competitive with each other.

Rod Sims, ACCC.

“The ACCC found that, at a high level, the services of the three companies do not compete closely. We considered a number of potential impacts on competition, including concerns raised by industry participants about the impact of the amalgamation on eftpos’ services and least cost routing.

“The ACCC recognises that rapid change is taking place in the sector, but ultimately it was satisfied that, with the undertaking, the amalgamation will not have a significant adverse impact on eftpos’ services or the availability of least cost routing,” he said.

Sims added that banks play a significant role in what payment systems will be accepted, and said there would still be substantial competition in the sector from the likes of Visa and Mastercard.

“Further, the merger will enable the three payment schemes to coordinate investment proposals and avoid inefficient duplicative spending. Importantly, this will increase the likelihood of the major banks and other shareholders investing in domestic payment services.

“This is likely to result in public benefit, by placing them in a better position to deliver payment service initiatives more quickly and successfully, for the benefit of consumers and businesses,” he said.

The big four banks, which are already majority shareholders in eftpos, BPay, and NPPA, will continue to hold the majority stake in the new company.

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