The Australian Competition and Consumer Commission proposes to authorise an agreement between members of the rediATM network not to charge each other's cardholders a fee for transactions undertaken at ATMs owned by any rediATM member.
rediATM network members also propose to coordinate the rollout of ATMs in the rediATM network.
The rediATM network consists of just under 100 members, most of whom are credit unions, and the National Australia Bank.
Under reforms to Australia's ATM system introduced in March this year, customers are now charged directly by ATM operators for transactions. Most banks do not charge their own cardholders for transactions.
Arrangements such as those proposed by rediATM members allow members to provide their customers with direct fee free transactions at a wider range of ATMs. This is important to ensuring that smaller ATM operators are not at a competitive disadvantage to financial institutions with a larger ATM footprint.
Instead of charging the cardholder a direct fee, members of the rediATM network will continue to charge each other a fee for ATM transactions undertaken by their cardholders. Each participant in the rediATM network will independently decide whether to pass this fee on to its cardholders.
"The ACCC considers the agreement between rediATM members not to charge each other's cardholders for ATM transactions will be pro-competitive, assisting to ensure that financial institutions with smaller ATM footprints are not at a competitive disadvantage to larger institutions," ACCC chairman Graeme Samuel said.
The arrangements have been operating under an interim authorisation granted by the ACCC shortly after the application for authorisation was lodged.
In June this year the ACCC authorised an agreement between members of the Feesmart ATM network not to charge each other's card holders for transactions undertaken at any ATM within the Feesmart network.
The ACCC is now inviting comments on the draft determination. The ACCC's draft determination and information about making a submission will be available from the ACCC website, www.accc.gov.au/AuthorisationsRegister and by following the links to this matter. Parties wishing to make submissions should do so by 18 November 2009.
Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Trade Practices Act 1974. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.