Strategic Review of Innovation in the Payments System: Conclusions June 2012

The Reserve Bank published the conclusions to its Strategic Review of Innovation in June 2012. The objective of the Strategic Review was to identify areas in which innovation in the Australian payments system may be improved through more effective cooperation between stakeholders and regulators. It took a medium-term perspective, looking at trends and developments overseas in payment systems and at possible gaps in the Australian payments system that might need to be filled through innovation over the next five to ten years.

In recognition that there are impediments to the payments industry delivering cooperative payment solutions in the public interest, the conclusions outline a change in approach by the Payments System Board of the Reserve Bank in relation to payments innovation. The Board proposes to set out high-level strategic objectives that it believes the payments system should be able to meet by a specified time. Hand-in-hand with this, the Board proposes to promote a more direct dialogue with the industry through the establishment of new industry governance arrangements.

The conclusions paper set out an initial set of strategic objectives, which include:

• same-day settlement of all Direct Entry payments (end 2013)
• the ability to make real-time retail payments (end 2016)
• the ability to make and receive low-value payments outside normal banking hours (end 2016)
• the ability to send more complete remittance information with payments (end 2016)
• the ability to address payments in a relatively simple way (end 2017).

The Bank sought input on the strategic objectives and timelines, and in particular on the approach to the provision of real-time retail payments. Responses were requested by the end of August 2012.