Interchange rates in Australia will remain under the close supervision of financial authorities, according to a ruling announced last week.

The Reserve Bank of Australia, the country's central bank, said that stepping back from regulating interchange rates likely would not result in lower costs for card transactions because the payments industry has yet to introduce new products that could increase competition.

Increased competition could come from improvements to Australia's point of sale and online payments systems, including better standardization and quicker funds transfers, the central bank said.

Card companies could also pledge not to raise interchange rates above current levels, the Reserve Bank said.

In 2003, the central bank began a process that led to lowering the interchange caps for debit and credit card transactions to 0.5% of the sale from 0.95%.

The bank last week indicated it might reduce the rate for credit cards to 0.3% but hold off doing so because the payments industry has shown "progress" on interchange and competition.

"Given the progress that has been made to date, the [bank] has decided to defer consideration of any further reduction in interchange [rates]," it said in a press release. The bank did not say when it would review the matter but said it is "prepared to reopen consideration of the regulations in light of industry development."

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