The three payment schemes say their merger will allow them to bring innovative products to market more quickly, and will not reduce competition.
BPAY Group, eftpos and NPP Australia have submitted a formal application to the ACCC (Australian Competition and Consumer Commission) seeking to amalgamate the three schemes under a single parent company and board.
Currently, these domestic payment organisations own and operate different and largely complementary payment schemes in Australia, in competition with international card services (Visa and Mastercard) and other global companies, including bigtech and fintech companies.
Last December, an Industry Committee comprising 13 mutual shareholders and eftpos members across the three entities announced a proposal to merge, to create a stronger and unified parent company that would be economically self-sustaining and not profit maximising.
The new entity is expected to help reduce costs, increase efficiency, and be better able to compete with the growing scale of overseas multinational payment platforms as it will be able to bring innovative products to market more quickly.
The Committee is seeking approval from ACCC to allow existing shareholders and members of BPAY, eftpos and NPPA to acquire shares in the parent company, while keeping the three payment schemes as separate brands.
Under the proposal, the organisations will be able to share information and collaborate with one another on new products such as QR codes and hybrid products based on the directions and resources of the parent company.
The Committee says the amalgamation is not likely to lead to reduced competition in any market and instead would possibly give rise to a net benefit to the Australian public.
“The owners of Australia’s three payment organisations are seeking to foster coordination and alignment between the three organisations to bring more payments innovations to market more quickly,” the Committee said. “Reducing duplication and fragmentation will see users of Australia’s payments system have access to payment innovations in a more timely and efficient way.”
An independent report submitted as part of the application to the ACCC states that the lack of coordination between the domestic payment schemes in the deployment of new technologies and services is slowing down the rate of innovation.
The Committee says small business and smaller payment users will be better represented under the new structure, which will include the formation of two advisory committees for scheme members and end-users that will each be chaired by an independent director of the parent company’s board.
A summary of the application to the ACCC is available here.