Payments System Board Annual Report – 2007 Engagement with Industry

Relationship with APCA

Since the establishment of the Australian Payments Clearing Association (APCA) in 1992, the Bank has had an automatic right to appoint representatives to the APCA Board and management committees. Over the past year, the Bank decided to relinquish these automatic rights. This followed the completion of a strategic review by APCA, which emphasised its role as a self-regulatory industry association. Given the Bank's regulatory responsibilities in the payments system, both the Payments System Board and the management of the Bank concluded that a change to the relationship between the Bank and APCA was appropriate.

Under the new arrangements, which were agreed in May 2007 and can be found on the Bank's website, the Bank and APCA will consult regularly on issues of common interest. In addition, the Bank continues to be represented on a number of APCA committees, although the representation is from the operational, rather than policy, areas of the Bank.

Ongoing Liaison

The Bank also continues to consult widely, both on a formal and informal basis, with a range of other participants in the payments system. Over the past year, discussions have typically focused on the upcoming review of the payments system reforms and the architecture and governance of the payments system.

Discussions on this latter topic followed work that the Board conducted in the previous year and outlined in the 2006 Annual Report.[20] This work suggested that while Australia had a good record of innovation in payment systems, there were some areas in which arrangements in Australia were starting to slip behind. In addition, it highlighted the bilateral nature of many payment systems in Australia and suggested that, under some circumstances, bilateral arrangements may pose challenges to access and innovation. In September 2006, the Deputy Chairman of the Board presented the Bank's research and findings to an industry forum assembled jointly by the Australian Bankers' Association (ABA) and APCA. The presentation emphasised that the Board saw the topics of technology and governance as largely ones for industry, although it would continue to monitor developments closely.

In response to the issues raised by the Bank, a number of industry working groups have been established and are currently examining issues related to the structure and governance of the payments system. One outcome of this work so far is the announcement by the ABA in July 2007 that it and APCA are considering options for establishing a centralised commercial governance structure for the EFTPOS network to develop and promote the EFTPOS system. The Board welcomes this initiative.

Speeches and Presentations

Over 2006/07, the Bank made a number of public speeches and presentations to explain the reforms and the Bank's plans for the upcoming review. The Deputy Chairman gave talks to: a forum established by the ABA and APCA on technology; SIBOS 2006; a conference on non-banks in the payments system organised by the Federal Reserve Bank of Kansas City; and the 4th International Consumer Credit Card Summit 2007 in Sydney. The Head of Payments Policy Department also gave two presentations focusing on the review of the payments system reforms to conferences on card payments, as well as a number of other presentations providing general information on the Bank's activities to industry participants.

International Meetings

In addition to engagement with payment system participants, operators and regulators in Australia, the Bank was represented on two regular international groups in 2006/07: the Committee on Payment and Settlement Systems Subgroup on Foreign Exchange Settlement Risk and the EMEAP Working Group on Payment and Settlement Systems.

As discussed in the chapter ‘Ongoing Regulatory Responsibilities’, the first of these groups, which met three times during the year, is responsible for oversight of CLS Bank and has been working on a survey of foreign exchange settlement risk. The second group is comprised of representatives from the EMEAP countries. The group meets twice a year to exchange information on developments in payment and settlement systems in their respective countries and to conduct joint work on topics of mutual interest. Over the past year, the group met in Sydney in October 2006 and in Singapore in April 2007. Its work has focused on oversight of SWIFT and, following the recommendations of the Task Force on Regional Cooperation, a detailed terms of reference and work program for the group.

In addition to these standing groups, Bank staff have contributed to a number of overseas courses and technical assistance. The Bank provided speakers for SEACEN's advanced course on payment and settlement systems in November 2006 and its intermediate course on payment and settlement systems in May 2007, as well as an IMF workshop on payments in April 2007. At the request of Bank Negara Malaysia, the Bank also provided a representative to the Malaysian National Payments Council which met in November 2006. The Bank also provided technical assistance to Bank Indonesia related to their payment systems under an AusAID program.


Payments System Board Annual Report 2006, September 2006. [20]