So for those who follow this thread, not those who want it handed to them on a platter:
I looked into setting up the scheme as described. It's a little convoluted but initially the best you'd get is around 2.6%. The use of premium or higher cards (which is what we all want to use) attracts much higher merchant interchange fees on Visa/MasterCard, but I believe it's all the same with Amex.
If I can get the AFSL or an appropriate exemption, rates could then be negotiated with Amex after reaching certain volumes and after holding such a facility for a period of time.
The risks on the business side are around potential fraud and chargebacks, although restricting the deposits to only well established government bodies could well mitigate that risk. Each user would enter into a contractual arrangement with the new company to provide "bill payment services" on your behalf.
As for PayPal, they have an arbitrary $12.5k limit on all credit card transactions, which wouldn't suit most of the high flyers around here.
Add to the initial 2.6% a service fee to cover ongoing costs of running the scheme and maintaining the license etc.
I could see the Amex rate going down to the 1.x% mark over the medium term once volumes increased, but being a financial product, the risk may be considered higher for them.
Anyway, still thinking about this possibility, especially considering the well is all but dried up these days with major cards now biting the dust.
