Submissions in response to the Reserve Bank's report and recommendations on further payment system reform are due on Friday and delegates at yesterday's credit card summit were unanimous in saying their submissions would call for the adoption of option three.The RBA spent much of last year reviewing the impact of the reforms it introduced in 2003. In a paper released in April, Reform of Australia's Payment System: Preliminary Conclusions of the 2007/08 Review, it put up three options for future regulation.Option one is the status quo option, retaining the current credit and debit interchange rules with minor modifications.Option two is to retain interchange regulation and reduce interchange fees further. The RBA said this was consistent with its intention to get the fees lower over time and to align debit and credit interchange. Option three is to remove explicit interchange regulation. "The option is for the (Payment System) Board to step back from interchange regulation if the industry is able to address a number of issues that would promote competition and efficiency in a timely fashion."Those issues include reforming the structure of the EFTPOS system, demonstrating that there is competition between the card systems, and doing further work on the honour-all-cards rule. "The Board sees it as important that payment schemes allow merchants to make independent acceptance decisions for each type of card for which a separate interchange applies. This would allow a merchant to refuse acceptance of, say, premium cards if it thought the cost of acceptance was too high relative to the benefit gained."Commonwealth Bank chief executive Ralph Norris told the conference: "We welcome option three. It is not 100 per cent consistent with our position but it is a step in the right direction. Option one is not realistic and option two would set fees at an unsustainable level."A focus on costs as a proxy for economic efficiency is overly narrow. It is poor policy."Norris said there would be difficulties. Formalising EFTPOS into a scheme would be "a challenge" and the suggested changes to the honour-all-cards rule would be "confusing".Australian Payments Clearing Association chief executive Chris Hamilton said option three was the only option that was about competition. "We believe in competition policy, not price regulation."We have had a lot of competition policy reform in this country and we have developed a competitive culture. What is it about the payments system that prevents it from being competitive?"It is hard to see price regulation as a permanent solution. No one wants the RBA to re-regulate."