'Money or Monies worth? Beware the Transaction 'Cost' of Payment Systems'

Abstract

The efficiency of business transactions has become increasingly important in the digital age, and an issue that has arguably evolved as a result of free-markets. Already, advances in technology has revolutionised the medium of exchange from tangible hard-cold cash, to an intangible medium, “digital data”. The current electronic payment systems (“PSs”) such as ATM, EFTPOS and credit cards are account-based PSs. Several new types of hardware-based PSs (e.g. Smart cards) and software-based PSs (e.g. DigiCash), have also developed. For instance, advancements in internet technology have enabled the “Egold” company in 1996 to trial private digital competing currencies. Recently, there has been increasing recognition by treasury groups who have lobbied for the development of a national based payment system – particularly in Australia, the United States (US) and the European Union (EU). This article will address the evolution and regulation of payment systems in select jurisdictions, but with a focus on the Australian position following the case of Visa International Inc v Reserve Bank of Australia. This case defined and highlighted the shifts that had taken place in a “payment system” (“PS”), both regulatory and structurally.