Media Release Payments System Board Update: February 2017 Meeting
At its meeting today, the Payments System Board discussed progress on the New Payments Platform (NPP). The Board welcomed the extensive collaboration among the participating institutions and the industry's ongoing commitment of significant resources to the NPP in preparation for the scheduled launch late this year. It also discussed the opportunities that the rich functionality of the system will offer for innovation by financial institutions and other providers of financial services as well as the benefits it will offer end users of the payments system.
The Board also discussed distributed ledger technology (DLT) and the possibility that innovation using this technology could support improvements in efficiency and competition and the reduction of some types of risk in the financial system. The Board agreed that it is important for regulation to remain technology-neutral, and to ensure that regulatory frameworks support innovation.
The Board discussed the review of the industry's ATM Access Code that is being undertaken by the Australian Payments Clearing Association (APCA). Members noted various technological and structural changes that have taken place in the ATM industry in recent years, which may allow a greater role for industry self-regulation. The Board agreed on some high-level principles that could guide the industry in its deliberations. These include that there are no unreasonable barriers to potential new entrants and that any fees charged for ATM usage should be disclosed up-front, with no return to the opaque pricing arrangements that existed prior to the 2009 ATM reforms. Bank staff will continue to engage with APCA on the Access Code review and as part of the process will be undertaking a review of the Bank's ATM Access Regime.
The Board had a preliminary discussion of submissions to its recent consultation on dual-network cards and mobile wallet technology. It noted that most submissions pointed to some potential issues for efficiency and competition if there are restrictions on the ability to provision both networks on a dual-network card in a mobile wallet. Respondents have expressed a range of views on a way forward, with some stakeholders arguing for a regulatory solution, and others suggesting that some form of industry undertakings might be appropriate. Bank staff will meet with stakeholders over the coming weeks to discuss their submissions in more detail.
The Board was also briefed on progress in obtaining an undertaking from UnionPay in relation to its rules regarding surcharging, consistent with the Board's expectations following its 2016 Conclusions to the Review of Card Payments Regulation.
Finally, the Board considered the Bank's 2017 Assessment of Chicago Mercantile Exchange Inc (CME). The Bank undertakes formal assessments of clearing and settlement facilities licensed to operate in Australia. The assessment will be published once it has been provided formally to the Assistant Treasurer and the Australian Securities and Investments Commission and to the relevant overseas regulators.
Note to editors
The New Payments Platform is an industry project to deliver real-time retail payment functionality, to meet the strategic objectives the Board established in 2012 following its Strategic Review of Innovation in the Payments System.