ACCC grants authorisation to allow coordination for public education campaign and mandatory PIN rules

18 December 2013

The Australian Competition and Consumer Commission will allow Visa and MasterCard, together with American Express and participating financial institutions, to coordinate in relation to the removal of signatures as a method of authentication for most credit card transactions completed in person.

The ACCC considers that public benefits will arise from coordination between the card schemes and financial institutions, and that the coordination is likely to lead to mandatory PIN@POS being implemented earlier by more card schemes.  

“A coordinated approach and a single message from industry is likely to lead to some efficiencies and less confusion for customers and merchants,” ACCC Commissioner Dr Jill Walker said. 

“Each card scheme can independently make decisions regarding the use of signatures or PINs without approval from the ACCC. In this regard, the ACCC notes that the card schemes and financial institutions consider that using a PIN at a point of sale is safer and faster than signing and can help protect against fraud for lost and stolen cards.”

“As the proposed coordination could give rise to concerns under the competition laws the card schemes sought this authorisation. The coordination was therefore the scope of the ACCC’s decision.”

“The ACCC considered that the coordination is unlikely to significantly reduce competition, as the card schemes will continue to compete on fees and all other aspects of their product and service offerings to financial institutions, merchants and cardholders.”

The ACCC notes that Visa, MasterCard and some financial institutions have advised that some consumers will be able to continue to sign for purchases if they are able to demonstrate that they are unable to use a PIN.

The ACCC has granted authorisation until 30 June 2015.

Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.

Further information is available on the authorisation register.

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