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Thursday, 8 June 1989
Page: 3748

(Question No. 853)


Senator Jones asked the Minister representing the Treasurer, upon notice, on 3 March 1989:

(1) With regard to an article in the Australian Financial Review entitled `Plastic power ready to take over shopping', will every major bank, building society and credit union in Australia be linked by a cashless, plastic network before the end of the month of March 1989.

(2) What measures are available to the Australian Government to regulate such potential initiatives from Australian or overseas banks, building societies and credit unions.


Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question:

(1) The electronic funds processing at point of sale (EFTPOS) systems, which allow customers to use plastic cards to transfer funds from their accounts with financial institutions directly to retailers' accounts, are becoming more widespread in Australia although the volume of transactions carried on EFTPOS systems is still not large. A key feature of EFTPOS developments in Australia has been the increasing number of linkages between the systems of different financial institutions. Most of the EFTPOS systems of the major and state banks have now been linked. Most other banks and most building societies and credit unions are able to offer their customers access to the terminals of at least one of the major or state banks.

(2) The development of EFTPOS system has been closely monitored by the Australian Payments System Council. The Council, established by the Treasurer in 1984 and chaired by a senior officer of the Reserve Bank, is required to foster interconnection between payments systems and to ensure that competition amongst all financial institutions benefits consumers. In September 1986 Commonwealth and State Ministers endorsed a code of conduct on electronic funds transfer systems drawn up by a Working Group comprising representatives of Commonwealth and State Governments. The code carefully defines the rights and obligations of users and providers of electronic funds transfer systems (including EFTPOS). The code requires institutions which issue plastic cards for customer use in electronic terminals to, inter alia:

(i) establish in their electronic banking contracts certain rights and obligations, particularly in the important areas of liability for unauthorised electronic transactions and liability for technical malfunctions;

(ii) follow certain minimum information disclosure requirements in providing these services; and

(iii) establish procedures to ensure that disputed electronic transactions are centrally recorded.

The code is not statutory but the conditions of use documents issued by institutions to cover users of plastic cards in electronic terminals are legally binding. The Working Group which drew up the code has been liaising with financial institutions since 1986 to ensure that card issuing institutions publish conditions of use documents which conform with the requirements of the code.