ACCC not to intervene in banks joint venture of voucher processing facilities

The Australian Competition and Consumer Commission will not intervene in the proposed joint venture of the voucher processing facilities of Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corporation, ACCC Chairman, Mr Graeme Samuel, said today.

"The ACCC has carefully considered the competitive impact of the proposed joint venture in various markets including the national wholesale voucher processing market and the national wholesale supply of agency voucher processing services market.

"The transaction will create a joint venture company, upon the completion of a competitive tender process, with the function of acting as a service entity.  As a result, the parties to the arrangement will collectively outsource their voucher processing requirements, but will not provide these facilities downstream as a single entity.  The banks will continue to compete for the provision of voucher processing services to downstream customers.

"Whilst the ACCC considers that the barriers to entry to the market are high, it does not consider that there will be any change to those customers who acquire voucher processing services.  In addition, the maturity of the voucher processing market has, in effect, foreclosed much of the market to potential entrants.  The ACCC also notes the continued decline of vouchers as a payment instrument.

"On this basis, the ACCC concluded that the proposed joint venture is unlikely to result in a substantial lessening of competition".

Background

The parties have proposed the joint venture for the collective outsourcing of Day 1 (and potentially image archiving) voucher processing services.  Voucher processing involves a number of functional steps including the collection of vouchers, their processing, fraud related functions, storage and archiving.  These functional steps are generally divided into Day 1 and Day 2 processing activities.  Day 1 processes include imaging, entering and balancing functions.  Day 2 processes include reconciliations, reprocessing, call centres and enquiry handling.  The principal type of vouchers processed by the parties are cheques, although voucher processing services are also provided for the processing of bill payments and other paper vouchers such as paper credit card transactions (merchant paper), cash slips, general ledger vouchers and drawing vouchers.