he Reserve Bank of Australia is taking a good, hard look at debit card networks, with an eye toward revamping interchange. And it says it's planning to take a fresh look at credit card interchange Down Under, too.

The Reserve Bank of Australia is the equivalent to the Federal Reserve in the United States. Each is its respective country's central bank, The reserve bank has the authority to regulate Austrailia's electronic payment system; the fed regulates electronic payments through the U.S. banking system. A few years ago, the Reserve Bank took on Visa and MasterCard, forcing the card Associations to slash interchange. That move resulted in $580 million (Australian) in savings to retailers last year, alone, according to the Reserve Bank.

Now the Reserve Bank wants to take on Australia's POS debit networks, or, as the Aussies put it, EFTPOS. The primary focus is interchange pricing, but the Reserve Bank's latest round of proposals also addresses network access and card duality.

Duality refers to rules requiring merchants who accept one card brand's credit product also must accept that brand's debit cards. In the United States, duality was addressed in the so-called Wal-Mart case. Out-of-court settlements in that case resulted in the decoupling of Visa's and MasterCard's credit and offline debit card products.

"In the Bank's opinion this restriction limits normal competitive forces," the Reserve Bank stated in its proposal to deep six credit-debit card duality rules. The Reserve Bank also wants to slash interchange fees for POS debit, and has proposed a maximum interchange rate of $0.05 - $0.15 (Australian). By way of comparison, interchange on Visa debit transactions runs about $0.40 (Australian) per transaction these days.

Unlike in the United States, POS debit interchange in Australia flows from the card-issuing bank to the merchant. Last year, a group of Aussie retailers challenged the Reserve Bank in court to stop the proposed rules, but the Australian courts upheld the Reserve Bank's right to regulate EFTPOS debit pricing.

Credit card interchange in Australia flows from the merchant to the card-issuing bank, as it does in the United States. But each card brand sets its own prices. The Reserve Bank is proposing a benchmark interchange fee for all credit card schemes in the country.