Aussie Central Bank Eyes Amex Regulation (Sept. 2, 2015)
Australia’s central bank may begin regulating American Express cards in the country, putting at risk the generous rewards points cardholders earn on so-called “companion cards”— credit card accounts linked to two different credit card networks, thus enabling cardholders to earn the benefits of whichever one they choose to use at the point of purchase. Companion cards enable cardholders to earn American Express’ higher rewards points when shopping at American Express-accepting merchants, while opting to use another network if merchants don’t accept American Express or surcharge for using it. Companion card programs have become popular in recent years in Australia, where the Reserve Bank of Australia (RBA) has capped interchange for MasterCard and Visa cards but doesn’t regulate interchange on American Express cards.
But that arrangement could be coming to an end. The RBA said this week that it’s considering taking the first step to regulating American Express cards in the country. Under a request from the bank’s Payments System Board, RBA staff will “liaise with industry participants on the possible designation of certain card systems,” including bank-issued American Express companion cards, according to a report by the Sydney Morning Herald. Such discussions would be the first step toward the RBA eventually imposing regulations on American Express, such as access rules or limits on merchant fees. The RBA already is considering wider reforms, including lowering existing interchange fee caps for all payment cards and a ban on merchant surcharges for debit cards, the Morning Herald reported.