Mastercard is a multinational financial services corporation incorporated in Australia and other jurisdictions that has been accused of anti-competitive behaviour in the past. There has been a lack of diversity in the market for credit card and debit card services, with only several vendors in the market. In the past, Mastercard had substantial market power because of its “must have” status.

The Reserve Bank of Australia had introduced the “least-cost routing” or “merchant choice routing” system in October 2017. These measures enable merchants to choose which debit card network will process their contactless dual network debt card. The measures had been implemented to improve competition in the debit card market and reduce costs associated with debit card payments.

Mastercard had entered into agreements with 20 different retail corporations in order to deter merchants from utilising the eftpos network in the context of these measures.

ACCC chair Gina Cass-Gottlieb said in a statement that “we allege that Mastercard had substantial power in the market for the supply of credit card acceptance services, and that a substantial purpose of Mastercard’s conduct was to hinder the competitive process by deterring business from using eftpos for processing debit transactions”.

Ms Cass-Gottlieb said, “we are concerned that Mastercard’s alleged conduct meant that businesses did not receive the full benefit of the increased competition that was intended to flow from the least cost routing imitative”.

She said, “reducing costs for businesses enables them to offer their customers better prices. Making sure the major card schemes, Mastercard, Visa and eftpos, compete vigorously is important for both those businesses and their customers”.

The ACCC said in a statement that “during the relevant period, Mastercard Australia sought to and did retain or obtain debit card processing volumes by making available to particular merchants, through contracts known as strategic merchant agreements (SMAs), more favourable prices on the processing of Mastercard-branded credit card transactions provided the merchants processed all or most of their debit card transactions through Mastercard. This meant that the merchants would not process any significant debit card volume through the eftpos network owned by Eftpos Payments Australia Limited (EPAL).”

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One of the functions of the internal Strategic Merchant Council established by Mastercard in October 2017 was in order to offer low offers to merchants as long as they routed all or almost all of their Mastercard eftpos debit card transactions through the Mastercard network.

The ACCC concluded that “the conduct of Mastercard was intended to prevent or hinder competition in the affected market because it involved the leveraging of power in the credit market to reduce or avoid competition in the supply of debit card acceptance services”.

Proceedings have been instituted in the Federal Court.