Payments System

The ‘payments system’ refers to arrangements that allow consumers, businesses, governments and other organisations to transfer funds to one another. It includes the payment instruments – cash, cards, cheques and electronic funds transfers – that customers use to make payments, as well as the usually unseen arrangements that ensure funds move safely and efficiently between accounts at financial institutions.

A safe, efficient and competitive payments system is essential to the day-to-day functioning of the Australian economy. The Reserve Bank of Australia (RBA) has a broad role in the payments system, including through policy, oversight and the operation of settlement services, to support confidence in the financial system.

Through the Payments System Board, the RBA is responsible for payments system policy, including policy for clearing and settlement facilities. In exercising this responsibility, the Board must act in a way that best contributes to controlling risk in the financial system, promoting the efficiency of the payments system and promoting competition in the market for payment services, consistent with the overall stability of the financial system.

Cash

The use of cash as a payment method has declined over time as consumers have increasingly adopted electronic payment methods. The Reserve Bank’s Consumer Payments Survey, first undertaken in 2007 and repeated every three years, remains one of the most comprehensive sources of data on individual cash payments. The latest survey was conducted in 2025.

The 2025 Consumer Payments Survey showed that cash use has stabilised in recent years. Around 15 per cent of payments were made in cash in 2025, compared with about 13 per cent in 2022. By value, the share of payments made in cash was little changed at around 8 per cent. Around half of Australians used cash in a typical week.

While cash is used less frequently than in the past, access to cash remains important for many Australians, particularly for those who rely on cash for budgeting, accessibility or as a backup when electronic payments are unavailable. The 2025 survey found that around one-third of Australians would face hardship or major inconvenience if they could not access or use cash. The Payments System Board has continued to monitor the long-term sustainability of cash distribution arrangements and has supported work on a regulatory framework for providers of cash distribution services, including crisis powers to help manage risks to the continuity of cash distribution services across Australia.

Non-cash Payments

Non-cash payments account for most of the value of payments in the Australian economy. These include high-value payments made through Australia’s real-time gross settlement system, card payments, direct entry payments, fast account-to-account payments and other electronic transfers.

The clearing of most non-cash payment instruments in Australia is governed by rules and procedures established under the auspices of AusPayNet, the payments industry’s self-regulatory body. These arrangements cover payment instruments including cards, cheques, direct entry payments and high-value payments, and support the exchange of payment instructions between participating financial institutions.¹

Around 75 per cent of the value of non-cash transactions is accounted for by a small number of high-value payments settled through Australia’s real-time gross settlement system, the Reserve Bank Information and Transfer System (RITS). Most of the value of these payments relates to the settlement of foreign exchange and securities market transactions.

The RBA continues to oversee the safety and resilience of key payment systems, including RITS and Australia’s fast payments system (the New Payments Platform, NPP). In 2025 and 2026, the Payments System Board considered work on the resilience of the Australian payments system, including risks associated with limited interoperability, third-party and concentration risks, and contingency arrangements for card payments.

Cheques

The migration of large business payments to the real-time gross settlement system and the broader shift to electronic payments have seen the importance of cheques decline substantially. Cheque use is now very low by historical standards and continues to be replaced by electronic alternatives. Australia is also moving to phase out cheques over coming years, with cheque issuance to cease by 30 June 2028 and cheque acceptance to cease by 30 September 2029 as part of an orderly wind-down of the cheque system.

Cards and Electronic Payments

The use of electronic payment instruments at the retail level has grown rapidly. Debit and credit cards, mobile wallets, direct debits, direct credits and fast account-to-account payments are now central to the way households, businesses and governments make and receive payments.

The RBA has also regulated aspects of the ATM system. Reforms introduced in 2009 were designed to improve competition and transparency by making it easier for new providers to participate in the ATM system, allowing ATM owners to charge cardholders directly for withdrawals and balance enquiries, and removing interchange fees for most ATM transactions. These arrangements made ATM fees more transparent to cardholders by requiring any direct charge to be disclosed before the transaction is completed.

The Payments System Board has continued to focus on competition, efficiency and transparency in card payments. Following its Review of Merchant Card Payment Costs and Surcharging, the Board concluded that a package of reforms to remove surcharging on designated debit, prepaid and credit cards, lower interchange fee caps and increase transparency over payment fees would be in the public interest. Most changes are scheduled to take effect on 1 October 2026, with some further changes to foreign interchange caps and payment cost transparency to follow on 1 April 2027.

The Board has also considered broader issues that may affect competition, efficiency and safety in the payments system, including mobile wallets, three-party card schemes, buy-now-pay-later services and e-commerce platforms. The RBA is consulting on regulatory priorities under the updated payments regulatory framework.

Account-to-account Payments

For many years, Australian governments and businesses have made extensive use of Direct Entry credits for social security and salary payments. Consumers and businesses also establish direct debits for bill payments. The industry is now working on the future of account-to-account payments, including the role of the NPP and the intended transition away from legacy arrangements over time.

The Payments System Board has continued to monitor the modernisation of account-to-account payments. It has noted industry initiatives to develop a shared vision and objectives for account-to-account payments, while also emphasising the need for effective governance, risk management and industry consensus, particularly in relation to the future processing of bulk payments.

Clearing and Settlement Infrastructure

The RBA has a formal regulatory role in relation to clearing and settlement facilities that support financial markets. These facilities are critical to financial stability because they help ensure that transactions in financial markets are cleared and settled safely and efficiently.

The Payments System Board has continued to focus on the risk management and operational resilience of financial market infrastructures, including ASX clearing and settlement facilities. Following the CHESS batch settlement failure in December 2024, the Board has considered ASX’s remediation plans, the design and resilience of CHESS Replacement, and further regulatory steps to support the safe and reliable operation of infrastructure that is critical to Australia’s financial markets.

The Board has also overseen work to operationalise the RBA’s crisis management and resolution powers for domestic clearing and settlement facilities. Guidance on the Australian clearing and settlement facility resolution regime has been developed to provide stakeholders with information about how the RBA would generally expect to exercise these powers.

Innovation and the Future of Money

The payments environment continues to evolve rapidly as new technologies, business models and forms of digital money emerge. The Payments System Board’s strategy focuses on strengthening resilience, promoting a competitive, accessible and innovative payments system, and shaping the future of money so it meets the evolving needs of the community, economy and financial system.

The RBA continues to examine innovations in digital money and the associated infrastructure required to support wholesale tokenised asset markets, drawing on insights from the completed Project Acacia. It has also broadened its focus on cryptographic resilience across the payments system, including risks arising from advances in classical and quantum computing and the need for coordinated industry action to strengthen cryptographic protections.