money

Hyperconnectivity

Cloudsurfing and payments

Many in our industry are watching in fascination as the United States inches towards a real-time payments solution. There are three recent developments: the Fed’s Faster payments task force has defined effectiveness criteria for a new payments system, NACHA has received the Fed’s approval for its same day ACH rule, and most interestingly, The Clearing House – the high value clearing network for the larger banks – has announced a letter of intent with Vocalink to develop a new real-time system. Judging by the Chicago Payments Symposium hosted by the Chicago Fed last month, there is still nothing like consensus on the “right” outcome, and the US is still some years from new mainstream payments services that are “cloud ready”.
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Banked World

New research highlights an increasingly “banked” world

Billions of people, primarily in developing countries, have historically had neither bank accounts nor access to electronic payments. When saving and making payments, they have had to rely on cash. This is rapidly changing. According to the recently-released World Bank Global Findex, in 2014, 62 per cent of the adults worldwide had a formal account with a financial institution or mobile money service – a dramatic increase from 51 per cent in 2011. This upswing in financial inclusion has been facilitated by a growing middle class in many developing countries and easily available technology, in particular the mobile phone. However this growth has taken a different path in different regions.
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Payment Costs

Payment costs in Australia – early observations from new RBA research

With complex processes and multiple parties, determining the costs of payments can be difficult. In recent years, the Reserve Bank of Australia (RBA) has taken up the challenge and released a research report on the cost of payments in Australia. This represents a long-awaited follow up to research last done in 2006. The most recent RBA report dated December 2014 draws upon data collected in 2013 from financial institutions, businesses and consumers and seeks to quantify the overall cost of payments and the cost of various payment methods. This includes both “resource costs” (the costs to the whole economy) and “private costs” (the costs borne by consumers, merchants and financial institutions respectively).
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ATM statistics – are we slipping back into our old ways?

The introduction of ATM direct charging in March 2009 has been one of the more public experiments in consumer behaviour within Australian retail payments. With three and a half years of statistics now available, we are developing a clearer view of its impact. On the supply side, direct charging has accompanied a rise in the number of ATMs. There were 25,000 ATMs in Australia in mid-2008 and now there are over 30,000. Despite more ATMs, direct charging has also seen a contraction in the number of withdrawals, with a drop by about 30 million withdrawals between 2008-09 and 2009-10. While this decline coincides with the GFC, the average withdrawal amount rose slightly during this period - suggesting slightly fewer but slightly larger withdrawals from ATMs as a response to direct charging.
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High Value Banknotes

High value banknotes: are they really under the beds of older Australians?

In September of this year, Peter Mair’s submission to the RBA Innovation Review Conclusions created a surprising media splash. Mr Mair, a former RBA official and current finance media commentator, suggested significant and widespread hoarding of $50 and $100 banknotes by older Australians. In the media frenzy that followed, Mr Mair further suggested that “the average pensioner couple could hold up to $50,000 in undeclared $50 and $100 notes to get access to the pension.” Not surprisingly, these comments set off a media firestorm. The Minister of Finance Penny Wong commented, responding, somewhat tongue in cheek, that she hadn’t been looking under any pensioner’s bed for cash! The coverage raises the issue of high denomination banknotes in Australia. Are we awash in high denomination banknotes in Australia? Is Australia out of line with its international peers? Where are all those $100 notes and what are they being used for?
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