At its meeting today, the Payments System Board discussed a number of issues, including:

• The annual Assessment of the ASX clearing and settlement facilities against the Financial Stability
  Standards. The Board endorsed the Bank’s Assessment, which will be published after it has been
  provided to the Treasurer and the Australian Securities and Investments Commission. The Board also
  discussed and welcomed ASIC’s initiative for ASX to establish an industry Advisory Group for
  strategic clearing and settlement issues related to cash equities.
• The oversight of international financial market infrastructures including LCH SwapClear, CME,
  Clearstream Banking, Euroclear Bank, CLS and SWIFT. The Board noted that LCH SwapClear is in the
  final stages of implementing an extension of its operating hours to cover the Australian business
  day.
• Prominent payment systems. The Bank has been consulting with industry on the development and
  implementation of a framework for the oversight of prominent payment systems where an operational
  complication could cause significant economic disruption and damage confidence in the financial
  system. The Board also considered the effectiveness of the risk management framework and operational
  risk management of the New Payments Platform (NPP), operated by AP+ and discussed the importance of
  continued investment to deliver a safe and resilient NPP.
• Competition in the debit card market. Based on industry feedback gathered during a recent public
  consultation, the Board decided that it would not further explore prohibiting card schemes and
  issuers from setting a default routing network on dual-network debit cards. Feedback indicated that
  such a prohibition could result in failed transactions and require a costly reissuance of all debit
  cards. The Board, however, remains strongly supportive of merchants having the ability to choose
  their preferred debit card network through least-cost routing (LCR). While LCR is now widely
  available to merchants for in-store transactions from a technical perspective, the functionality has
  not been enabled for many merchants. The Bank has published LCR
  reporting from large providers, which indicates that 54 per cent of their merchant
  customers had LCR enabled for in-store transactions at the end of June, with this share only
  increasing marginally over the year. Further, the industry has not made sufficient progress in
  enabling LCR for online transactions, with only a few providers making LCR widely available to their
  merchants for online transactions. The Board expects providers to make faster progress on enabling
  LCR for merchants that could benefit from it. If substantial progress is not made by June 2024, the
  Bank will explore a formal regulatory requirement to enable LCR.
• Improving the security of debit card transactions in the online environment. A recent public
  consultation indicated there was broad support among stakeholders for the industry to explore
  introducing more standardisation for payment card tokenisation to promote security, efficiency and
  competition in the payments system. Following further consultation with industry, the Bank will
  publish high-level expectations for the industry by the end of 2023. These expectations will outline
  the steps that the industry needs to take, and the deadlines for their completion, to help ensure
  that the security benefits of tokenisation are realised.
• International and domestic work on central bank digital currency (CBDC). Members discussed the
  ongoing research on CBDC, including the Bank’s CBDC pilot project with the Digital Finance
  Cooperative Research Centre (DFCRC), which concluded in late July. The project explored use cases
  that could be supported by the issuance of a CBDC in Australia. The Bank and the DFCRC will publish a
  report on the project in late August. The Board also met with firms in the digital asset industry to
  discuss issues relating to the future of money in Australia, including the opportunities arising from
  asset tokenisation and the potential role of CBDC in the digital economy.