Michael Pascoe writes:

By implication, Richard Gluyas’ Weekend Oz story on a federal parliamentary committee’s inquiry into the Reserve Bank’s
payments system changes raises two intriguing questions:

1. Just who is pulling the committee’s chain?

2. Did Woolworths’ CEO and RBA board member Roger Corbett have any
inside information on where the RBA was heading when he started negotiating an
ATM deal with ANZ?

Gluyas is well ahead of the House of
Representatives Standing Committee on Economics, Finance and Public
Administration out-of-date website in reporting that the committee is planning an “unusual” two-day hearing in May
dedicated entirely to just one aspect of the RBA’s activities – its
deregulation of the payments system that has managed to annoy both banks and
retailers by attacking their hidden fee grabs.

The banks have lost a reported $500 million
in “interchange” fees on credit cards since the RBA’s reforms started three
years ago and now retailers are facing the chance of losing hidden fees on
debit cards.

The Reserve Bank Governor already fronts
this committee twice a year for a chat about what the central bank is up to and
anything else the somewhat-less-than-scintillating committee members might want to talk about. (At least
Craig Emerson and Lindsay Tanner are there to keep up with the monetary banter.)
So why the sudden need for a two-day hearing on just one aspect? As Gluyas
reports:

It comes amid suggestions from parts of the banking industry – which has
lost substantial fee income from the RBA’s reforms to the payments system –
that consumers have not benefited and that the Australian Competition and
Consumer Commission should be reinstated as regulator.

NSW federal
Liberal MP Bruce Baird, chairman of the standing committee on economics,
finance and public administration, said yesterday he had heard the calls. “Let’s not
pre-empt the inquiry,” he said, adding it was a “good question”
why the payments system should have a different regulatory system from other
parts of the economy.

“But bear
in mind the ACCC has already flick-passed this (regulatory responsibility) to
the RBA.”

That’d be Bruce Baird, Member for Qantas.
The suggestion raises another question about the perception of Graeme Samuel’s
performance as ACCC commissioner if the banks think he’s a softer option than
the RBA, but we’ll let that one pass and look instead at what the retailers are
claiming and Roger Corbett’s move:

It is estimated
that about $170 million the retailers receive from the banks for handling card
transactions could be chopped. An umbrella
group for major retailers, the Australian Merchant Payments Forum, has warned
that any changes to eftpos fees could force up the price of goods or result in
the withdrawal of the free cash-out option for customers.

Woolworths boss
Roger Corbett, who is an RBA director, moved earlier this month to minimise any
damage, opening up a new source of fee income by announcing a deal with ANZ to
install more than 700 ATMs in the retailer’s supermarkets.

Given the windfall retailers copped from
the dropping of credit card interchange fees, they’re more than a little
hypercritical fighting transparency on
debit cards. Still, a vested interest is a vested interest – and this one has
snared an unusual amount of Mr Baird’s time.