RBA – APCA Blog

Australia’s new $10 banknote

Olga Cahill — Tue, 19 Sep 2017 22:00:07 +0000

On 20 September 2017, the Reserve Bank of Australia (RBA) released the second banknote in the Next Generation Banknote (NGB) program. We are pleased to be coordinating industry efforts to transition from old notes, released nearly 20 years ago, to…

Read more Australia’s new $10 banknote

Cash: the Next Generation

Alice Markie — Wed, 31 Aug 2016 22:36:53 +0000

The first in the new Next Generation Banknote series went into circulation today. This begs the $5 question: what role does cash play in our payments mix? Michele Bullock, Assistant Governor (Business Services) at the Reserve Bank of Australia and…

Apple Pay in Australia

Chris Hamilton — Mon, 10 Aug 2015 04:21:41 +0000

Here at APCA, one of our jobs is to ensure that the community is well informed about payments systems and their future evolution. We were therefore very interested in recent industry media commentary on the evolution of new payment technologies and, in particular, the progress of Apple Pay in Australia.

Australian payment institutions have been criticised by some in the local media for not getting together to make Apple Pay happen. I am not privy to any commercial discussions (of course), but that is a little surprising. There just might be legitimate pro-competitive reasons for that not happening – they are competitors and given Apple’s market weight, they will doubtless have a significant effect on competitive dynamics. This bears careful thought.

RBA data suggests 40% of credit card values in Australia are now card-not-present

Brad Pragnell — Fri, 06 Mar 2015 04:07:58 +0000

Change is pretty well the only constant when it comes to consumer payments. In Australia, we have seen a rapid uptake in contactless card use as well as increased use of online payments. Conversely, we have seen a rapid decline in personal cheque use as well as an ever-diminishing use of cash.

Monitoring changing payment usage can be notoriously difficult. The Reserve Bank of Australia (RBA) and APCA collect and publish statistics from industry participants on cheques, cards and electronic payments as well the number of ATMs and POS devices. However, other types of usage such as cash use and the split between card-present (point-of-sale) and card-not-present (internet, telephone and mail) transactions are more difficult to track. Consumers and merchants don’t regularly record or report their own payments activity – meaning we only get a partial picture of how payments use is evolving.

Payment costs in Australia – early observations from new RBA research

Brad Pragnell — Mon, 05 Jan 2015 23:23:41 +0000

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).

Of payment regulators and payments councils

Chris Hamilton — Thu, 21 Aug 2014 04:56:37 +0000

Try Googling "Payments Council", at least from Australia, and the first entry you get is the UK Payments Council home page, trumpeting its Faster Payments service, its mobile to mobile payments facility "Paym" and its automated account switching service. The next four entries relate to the joint RBA/APCA consultation on, and establishment of, an Australian Payments Council, which is approaching completion with an inaugural meeting later this year. One might be forgiven for assuming that Australia is in the process of establishing the same kind of body that already exists, and appears to be doing quite a good job, in the UK.

Now try Googling "Payment Systems Regulator". The first four entries relate to the UK development of a new regulator with extensive powers over retail payment systems. The fifth entry is the home page of RBA's Payments System Board, established more than 15 years ago with (rather less extensive) powers to regulate Australian payment systems. Again, one might be forgiven for assuming that the UK was in the process of establishing a regulatory framework on the long-standing and, according to the Financial System Inquiry (FSI), successful Australian model.

Both these assumptions would be wrong. Beware the besetting sin of an information-rich age: analysis by search engine.

Big ideas in a little province

Brad Pragnell — Thu, 21 Aug 2014 00:24:02 +0000

I had the honour and pleasure of recently attending and participating in the Canadian Payment Association’s Payments Panorama 2014, held this year in beautiful Charlottetown, Prince Edward Island. Prince Edward Island is Canada’s smallest province, with a mere 0.5% of the Canadian population and a total area only twice that of the Australian Capital Territory. Yet on this postage stamp gem in the Gulf of St Lawrence, some big ideas concerning the future of Canadian payments were being discussed.

By way of background, Canada and Australia share many features and our payment landscapes have some similarities. Both have a long-standing national payments body and a competitive national domestic debit card scheme. Australians and Canadians are enthusiastically embracing new ways of paying, including mobile and contactless. The Government and regulators in both countries have intervened on the fractious issue of interchange fees, though Canada has adopted a more disclosure-based approach than the harder caps found in Australia.

Fast payments – the difference a year makes

Chris Hamilton — Wed, 22 Jan 2014 15:11:40 +0000

This time last year, I reported on the lodgement of an industry proposal to develop new real-time payments architecture for Australia. Rashly, I suggested that:

- The Payments System Board would back the industry proposal (they did);
- APCA would publish the proposal in full, so everyone knew what we were on about (we did); and
- Industry collaboration on the new architecture would need to get going quickly if we were to have a shot at meeting the challenging timeframes set by RBA (and that happened too!)

A health plan for the payment system

Chris Hamilton — Wed, 26 Jun 2013 06:15:48 +0000

Recent data shows Australian non-cash activity overtaking cash transactions for the first time. These days almost every economic act other than a small consumer purchase requires an electronic transfer of value through the payment system by card, direct credit, direct debit, BPAY or some other method. This means that the payment system has become to the economy what your arteries and veins are to you – critical for economic health. One might think, then, that keeping the payment system “fit” (that is, secure, efficient and competitive) would be the subject of a well-developed “health plan”. Curiously, in many countries this has not been the case.

UK payments system self-regulation under scrutiny

Chris Hamilton — Fri, 19 Apr 2013 00:30:58 +0000

Last month, the UK government published a consultation paper on “Opening up UK payments”. According to the paper, “the self-regulation of financial services…has been discredited.” Say what? The world over, payments systems have been almost entirely self-regulated, so this is a big call. The evidence cited in the paper for this includes the LIBOR-rate fixing scandal and the failed attempt to eliminate UK cheque clearing. And of course, there is enduring rancor over the public bailout of UK banks during the global financial crisis.