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Sydney, 18 December 2006 - MasterCard Worldwide today issued the following response to the RBA's announcement of its planned review of the payment system regulation in Australia.

"It is good news that there will finally be a review of the payments system regulations in Australia, as there is clear evidence that the regulations have had unintended consequences and harmed both consumers and merchants. Given this ongoing impact on the Australian community, the review should be undertaken immediately, and not delayed until 2008." said Leigh Clapham, executive vice president, Australia, MasterCard Worldwide.

"Furthermore, we are sorely disappointed that the RBA is conducting this review itself. We cannot honestly see how the review can be balanced, given the RBA is unlikely to admit its intervention has been unsuccessful and produced undesirable consequences.

"The RBA's regulation of the payments system back in 2003 was based on an incorrect assumption that cash carries no cost. But independent research by PricewaterhouseCoopers, undertaken on behalf of MasterCard Worldwide contradicts this view. In reality cash is expensive to handle for both the consumer and the merchant.

"The RBA has previously focused purely on the relative cost of card transactions and has ignored their advantages. But cost is just one element of the value chain. At least this review will look at how and why people use different methods, taking into consideration all of the benefits card payments afford both the consumer and the merchant.

"With respect to the review of the Interchange Fee Standard also flagged by the RBA, MasterCard Worldwide strongly believes that it is of critical importance that the standard be amended to remove the unfair advantage enjoyed by one card scheme over another and especially the advantage given to three-party schemes, like American Express, which are unregulated."

MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes over 16 billion transactions each year, and provides industry-leading analysis and consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard Worldwide serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercardworldwide.com.

Melissa Devine, 02 9818 0950, mdevine@ppr.com.au
Michael Pooley, 02 9818 9310, mpooley@ppr.com.au