Transcript of Question & Answer Session Card Payments and the Retail Sector

You mentioned all the work that you’ve done in reviewing all the data that’s available to you but one thing which I think you didn’t mention was blockchain. I’m just interested to understand the extent to which you’ve examined blockchain as part of any payment methods and systems in the future?

Yes I didn’t mention blockchain. It’s obviously a big thing, there’s a lot of talk about it, it’s still in many ways unexplored and we do devote significant attention to looking into that. There are a lot of things that you could say about blockchain, it’s really it’s a whole new way of constructing cumulative databases which potentially has a lot of application to payment systems. The obvious high profile example of an application of that is Bitcoin, which I think is not the next big thing but the question is whether the technology can be applied to things that can be used in payments. I think the general observation I’d make about blockchain is that I think in economic terms its potential role is that the technology itself is so secure that people will be able to trust the technology without having to necessarily trust an institution that’s behind it and that gives you the scope to create payment mechanisms that aren’t necessarily institution based. I think at that kind of big-thinking level, that idea hasn’t really yet been tested but it’s certainly something that we need to keep an eye on because it potentially does have a lot of application.

I saw a hand go up over here if I could just have it thank you.

So recently in the last few months we have seen a new better off payment which is using the mobile phones like Apple Pay or even ANZ has got their own app and even Samsung has got their own payments, so where do you see this joining the chart of the cost of payments and everything?

Well I think there’s a very big demand, as I was saying earlier, for the ability to make payments through convenient methods that are based on mobile phone technology and there are a number of big players that are competing to get into that space to be the leading providers. I think that sort of competitive tension has still got a long way to play itself out yet but I think it’s definitely the case that we’re heading into a world where more and more the future is going to be mobile based rather than things like physical cards.

So do you see much of the legislative challenges there as to who does what and obviously there is a battle going on with the big four banks with Apple Pay, what is the role of RBA and – what is the role of RBA?

Well there are some complicated competitive issues going on here and these have been well publicised in the media the big players are in negotiations with each other about access and all those sorts of things, I think it would be dangerous for me to make public comment on that other than to say we keep a close eye on it and I know the ACCC takes a close interest in these things as well but we’re talking about some very large players that are engaged in some quite high pressure negotiations with each other and it’s probably not a good thing for me to be commenting on that publicly.

Ladies and gentlemen I think we’ll have to leave it there we have run out of time. Once again ladies and gentlemen would you please put your hands together thanks very much Malcolm.