At its meeting today, the Payments System Board discussed a number of issues, including:
- Payments system regulatory reforms. The Board welcomed the Government’s response to the recent
reviews and inquiries dealing with the regulatory architecture for payments in Australia. Members
discussed a number of aspects of the reform agenda, such as the development of a strategic plan for
the payments ecosystem and measures to modernise the regulatory framework, including the Bank’s
- Annual review of the systemic importance of payment systems. Members reviewed developments in the
payments landscape and affirmed that RITS is currently the only domestic systemically important
payment system. The Board discussed scenarios under which an existing or emerging payment system
could become systemically important and subject to ongoing oversight and assessment against the
Principles for Financial Market Infrastructures.
- The Government’s critical infrastructure reforms. The Board observed that several payment systems
have been specified as critical infrastructure assets in the
legislative framework – the Mastercard debit and credit card systems, the Visa debit and
credit card systems, the EFTPOS card system and the New Payments Platform. The Board was briefed on
the new obligations that would apply to the central operators of these payment systems as part of the
Government’s amended framework.
- The Bank’s Review of Banknote Distribution Arrangements. The Board discussed key themes from
stakeholder submissions to the Issues Paper. The purpose of the review is to examine how the banknote
distribution system can remain effective, efficient, sustainable and resilient in the face of
declining cash use. Bank staff will be meeting with stakeholders and a subsequent paper setting out
stakeholder feedback and recommendations will be published in the second half of the year.
- Research on central bank digital currencies (CBDC). Members observed that the pace and scope of
international research on CBDC had increased significantly in the past year. While a few
jurisidictions have launched or are piloting CBDC, most countries are still investigating the
potential benefits, risks and other implications of CBDC. The Board also discussed progress of the
Bank’s research program on CBDC, including the completion late last year of a collaborative
project on wholesale CBDC and a project the Bank is currently involved in with a few other central
banks to examine the potential use of CBDCs on a shared platform for cross-border settlements. The
Bank will continue to pursue an active research agenda, and also expects to partner with the Treasury
later this year on a review of the viability of a retail CBDC.
- The implementation of the Board’s conclusions to the Review of Retail Payments Regulation. As set
out in the Conclusions
Paper to the Review, the Board expects large issuers to issue dual-network debit cards
(DNDCs). However, the Board agreed to a 3-year exemption from this expectation for a limited set of
debit cards issued to: (i) children; (ii) customers whose accounts are formally managed by another
person; and (iii) other vulnerable customers who explicitly request a card with restricted functionality. This will
give issuers more time to develop the capability to restrict transactions on DNDCs, particularly
online transactions, without undermining the Board’s broader policy goals. Accordingly, large
issuers can issue single-network debit cards to these customers until the end of 2024, but thereafter
will be expected to issue DNDCs.