At its meeting today, the Payments System Board considered a number of issues.
- The public launch of the New Payments Platform (NPP). Members welcomed the successful delivery of this important new payments infrastructure. Around 60 banks, credit unions and building societies are already using the NPP to provide their customers with real-time payments, with close-to-immediate funds availability to the recipient on a 24/7 basis, and the number of financial institutions and accounts linked to the NPP will progressively increase over the coming months. Members highlighted the convenience of addressing payments simply with a mobile phone number and the added benefits of sending more complete remittance information with payments. The Board was briefed on the performance of the NPP since the launch, the increasing number of users registered with PayID and the growing number and value of payments.
- Least-cost routing of transactions on contactless debit cards. The Board noted the benefits in terms of holding down payment costs in the economy from the continuing issuance of dual-network cards and the ability of merchants to set preferences as to which network is used when transactions are authorised. Members were encouraged that some financial institutions have made progress towards providing least-cost routing functionality to their merchant customers. The Board expects to make a decision at its May meeting as to whether the market is providing this functionality or if the Bank should issue a draft standard for consultation.
- Card-not-present fraud. The Board noted that a broad range of industry participants had recently come together to begin the process of developing a coordinated strategy to tackle rising card-not-present fraud. Members welcomed the willingness of the participants to collaborate on this issue and encouraged them to continue to work closely with the Australian Payments Network to develop a clear and effective strategy that balances the interests of all stakeholders, including merchants. Members looked forward to the strategy being finalised within the next six months and implemented soon after that.
- Technology and the evolving nature of payments in Australia. Members discussed the ongoing shift to electronic payments and the importance of these payments being secure, convenient and low-cost. They also discussed the potential for further innovation in retail payments from new players and technologies. This will be a major focus of the Board over the period ahead. The Board also discussed the potential for distributed ledger technology to be used for new methods of settlement of financial and other obligations.
- Cryptocurrency markets. The Board considered recent developments in the price of cryptocurrencies. Members noted the speculative nature of much of the trading and the risks to investors. While linkages between cryptocurrencies and the broader financial system are limited in Australia, the Board continues to monitor developments in these markets.
- The Bank’s Assessment of Chicago Mercantile Exchange Inc. for the 12 months ending 31 December 2017. 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 Minister for Revenue and Financial Services and the Australian Securities and Investments Commission and to the relevant overseas regulators.