Payments Policy

A safe, competitive and efficient payments system is essential to support the day-to-day business of the Australian economy. The Payments System Board of the Reserve Bank has a mandate to contribute to promoting efficiency and competition in the payments system, and the overall stability of the financial system.


Tony Richards, Head of Payments Policy

The Bank has got a number of roles in payments systems. One important one is that we operate the system that banks use to transfer funds between themselves – and there's very high values going through that obviously, something like $180 billion a day on average through that system. And the other important one that I'd like to talk about is the Bank's role as regulator of the payments system, and that's done by the Payments System Board. The Bank has two Boards, there's the Reserve Bank Board and the Payments System Board.

The Payments System Board has been given the responsibility for competition and efficiency of the payments system and also for controlling risk and promoting the overall stability of the financial system.

Our work on retail payments emerged from the Wallis Inquiry which found that the cost of payments in Australia were quite high and they gave the Bank a mandate to improve the competition and efficiency in the payments system. So our early work was with respect to the payments card systems, where there were a number of fees that weren't particularly transparent. There were also restrictive rules on merchants and so the Bank has put in a series of standards or regulations to improve the competition and efficiency in the card systems.

We've also done some work on the ATM system where the emphasis has been on making the cost of ATM transactions transparent to customers (rather than finding out about the cost of it a month later on their bank statement), and also ensuring that the owners of ATMs are able to charge and continue to provide the services.

The Bank has a responsibility to ensure that licensed clearing and settlement facilities operate in a way that promotes the stability of the Australian financial system. The Bank has put in place standards and it does annual assessments against those standards. What we do is we have ongoing dialogue with the clearing and settlement facilities. We understand their business models, we understand the risks they're taking, the new products they're offering and once a year we do an assessment of those clearing and settlement facilities.

The New Payments Platform is an exciting project that is building a new centralised or hub-based infrastructure that all financial institutions will connect to. And among other things, it's going to facilitate real-time payments between households. So, for example, if I was wanting to sell my car on a Saturday afternoon privately, I'd be able to make sure that the money had arrived in my account from the buyer before I hand over the keys.

So the Bank has been working closely with the industry. It's a collaborative project and the industry participants will also be building their own apps et cetera to offer new and improved payments services to their customers.