Australian competition watchdog clears merger of BPAY, eftpos, NPPA
The Australian Competition and Consumer Commission (ACCC) today announces that it has cleared the proposed merger of BPAY Group Holding Pty Ltd and its subsidiaries (together, BPAY), eftpos Payments Australia Ltd (eftpos) and NPP Australia Ltd (NPPA), after accepting a court-enforceable undertaking offered by the parties.
BPAY, eftpos and NPPA each provide payment services to consumers and businesses through their respective payment systems, BPAY, eftpos and the New Payments Platform.
“We do not consider that the merger of these parties will substantially lessen competition in any payments market, after taking into account the court-enforceable undertaking,” ACCC Chair Rod Sims said.
In the undertaking accepted by the ACCC, the merger parties have committed to ensure that, for a term of four years, eftpos will do everything in its control to make least cost routing available and promote it, and to ensure the eftpos payments scheme and the eftpos card-based issuing and acceptance infrastructure and services are maintained.
The undertaking also requires the merger parties to ensure that eftpos and NPPA develop and make available a set of Prescribed Services within agreed timeframes.
These Prescribed Services include fraud prevention measures, and technical developments that will allow online and in-app payments to be made using eftpos debit cards.
The merger parties have also committed to ensuring that BPAY, eftpos and NPPA agree an industry wide standard supporting payment with QR codes by the end of June 2022. This will be in coordination with Australian Payments Network Limited, Australia’s self-regulatory body and industry association for payments.
In addition to considering the likely impact of the merger on eftpos and least cost routing, the ACCC also considered the potential for broader competition impacts.
The ACCC found that competition between the payment services of eftpos, BPAY and NPPA is marginal, because their core payment services are for different uses and are largely complementary.
BPAY, eftpos and NPPA are each providers of payment services, and each own and operate payments infrastructure. BPAY’s core service facilitates bill payments. eftpos’ core service facilitates retail debit card payments. NPPA’s core service facilitates fast account-to-account payments.
The four major banks collectively are already the majority shareholders in eftpos, BPAY and NPPA and will continue to be the majority shareholders of the new merged company. All current shareholders of BPAY, eftpos and NPPA will continue as shareholders of the new merged company, except the Reserve Bank of Australia.
During the authorisation review process, the ACCC has consulted with the Reserve Bank of Australia as Australia’s payment systems regulator rather than as a shareholder of NPPA. The Reserve Bank of Australia has abstained from discussions with the NPPA board on the merger proposal and did not exercise its right to be represented by Industry Committee Administration Pty Ltd who applied for merger authorisation.