Transcript of Question & Answer Session Card Payments and the Retail Sector
Malcolm Edey
Assistant Governor (Financial System)
Australian Financial Review Retail Summit
Melbourne –
Question
You mentioned all the work that youve done in reviewing all the data thats available to you but one thing which I think you didnt mention was blockchain. Im just interested to understand the extent to which youve examined blockchain as part of any payment methods and systems in the future?
Malcolm Edey
Yes I didnt mention blockchain. Its obviously a big thing, theres a lot of talk about it, its 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, its really its 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 Id 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 thats behind it and that gives you the scope to create payment mechanisms that arent necessarily institution based. I think at that kind of big-thinking level, that idea hasnt really yet been tested but its certainly something that we need to keep an eye on because it potentially does have a lot of application.
Moderator
I saw a hand go up over here if I could just have it thank you.
Question
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?
Malcolm Edey
Well I think theres 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 its definitely the case that were heading into a world where more and more the future is going to be mobile based rather than things like physical cards.
Question
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?
Malcolm Edey
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 were talking about some very large players that are engaged in some quite high pressure negotiations with each other and its probably not a good thing for me to be commenting on that publicly.
Question
Ladies and gentlemen I think well 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.