Strategic Priorities for Payments Policy

Strengthen the resilience of payments and market infrastructures

The Bank plays a role in supervising payments and market infrastructures to promote financial stability. Market volatility has highlighted the importance of the Bank’s monitoring of financial and operational risk management practices of CS facilities for the smooth functioning of the financial system. This past year, the Bank made recommendations for strengthening the governance and risk management arrangements of Australian CS facilities and payments infrastructures.

Retail payment services also play an important role in supporting economic activity. As the reliance on electronic payments increases and use of cash declines, the reliability of retail payment services becomes more important. The Bank is the relevant Commonwealth regulator to oversee compliance by certain payment system operators with the requirements of the Security of Critical Infrastructure Act 2018. The payment systems these operators provide are critical to the reliability of financial services and markets. The Bank is committed to ensuring these operators maintain robust risk management programs so that their services are reliable and secure. The Bank is also closely monitoring industry and government efforts to reduce payment scams.

Advance and implement reforms for payments and market infrastructures

During the past year, the Bank continued to work with the Australian Government on implementing reforms for payments and market infrastructures. The reforms will support the effective regulation of the facilities underpinning Australia’s financial system by strengthening the supervision and enforcement powers of ASIC and the Bank. In particular, the reforms include stronger supervisory and new crisis powers for Australian CS facilities.

The Bank is also working with the government to modernise the regulatory architecture of Australia’s payments systems. The reforms will enable regulators to address risks related to payments as they become increasingly more complex. In addition, the Bank supports the expansion of the regulatory perimeter of the Payment Systems (Regulation) Act 1998, and for the government to have the power to intervene to address emerging issues.

Promote competitive, cost-effective and accessible electronic payments

The Bank has an important role to play in ensuring that payment services remain efficient and meet the needs of users of the payments system. The Bank has encouraged greater availability of least-cost-routing functionality to facilitate competition between debit card networks. The Bank has also obtained undertakings from the international card schemes to lower the risk of anti-competitive practices in the debit card market. A key focus has been the adoption of digital wallets and their associated costs.

Enhance cross-border payments

With global commerce continuing to grow, there is an increasing need for efficient, competitive and safe cross-border payment services. As such, the Bank has undertaken several initiatives to improve the interoperability of payments systems around the world and provide better outcomes for Australian consumers. G20 countries, such as Australia, have endorsed a roadmap for cheaper, faster and more accessible cross-border payments. In collaboration with industry and other agencies, the Bank has taken several key actions to encourage the adoption of new functionality and capabilities for cross-border payments. The Bank has also established a group to study the potential of the New Payments Platform to link with other fast payments systems around the world.

Shape the future of money in Australia

The Bank is working to shape the future of money in Australia by exploring the case for new forms of digital currency. At the same time, the Bank is ensuring that cash remains a viable payment option for those who wish to use it. Over the past year, the Bank worked with the Digital Finance Cooperative Research Centre on a research project that focused on exploring potential applications of a central bank digital currency. The project generated significant interest and engagement from industry participants and the results of the pilot will feed into further work between the Bank and Treasury. The Bank has also focused on understanding developments in the use of stablecoins and the risks associated with stablecoin activity.