Reserve Bank calls for comments in payments review

The Reserve Bank of Australia (RBA) has invited public comment on the roles of data standards, security, system architecture and governance in the Australian payments system.

It launched the formal consultation phase of its Strategic Review of Innovation in the Australian Payments System last week, after having consulted with stakeholders since last July.

In its 36-page-long discussion paper (pdf), the Reserve Bank said it aimed to identify current or emerging gaps in the payments system, and any barriers to necessary innovation.

The Review focused on retail payment systems used by consumers and most businesses, and highlighted timeliness, accessibility, ease of use and integration, pricing, safety and reliability as chief end-user concerns.

Other payment system design features of interest to the Reserve Bank were: efficiency and cost-effectiveness; security and robustness; interoperability; open access; risk management; and adaptability.

Based on two RBA-commissioned studies of consumer payment patterns, the Bank noted that the use of cash and cheques had declined significantly since 2007, with both eftpos and scheme debit cards gaining market share.

Only two percent of transactions were made using internet or telephone banking in 2010; however those tended to be larger in value, and accounted for nine percent of the value of consumer payments.

Online payment methods such as Paymate, PayPal and POLi accounted for about one percent of total transaction volume and value in 2010, according to the more recent consumer study (pdf).

The Bank noted that Australian consumers appeared to be “reasonably comfortable with online payment methods”, but were concerned about the risk of fraud online.

Contactless and mobile payments were found most commonly to be worth between $21 and $50, suggesting that the technology was in fact replacing card transactions, instead of low-value cash transactions.

The Reserve Bank questioned if there were any impediments to the development and adoption cash replacements, and whether or not it should intervene in declining cash usage.

It also called for feedback on its role in “setting the reform agenda” for the payments industry.

Submissions from the public were welcomed until 31 August. The Reserve Bank expected to conclude its review by early 2012.