Payments System Board Update: May 2023 Meeting
Source link – Reserve Bank of Australia
At its meeting today, the Payments System Board discussed a number of issues, including:
- The Banks targeted assessment of Australias real-time gross settlement system – the
Reserve Bank Information and Transfer System (RITS) – against the relevant international
standards. The Board approved the assessment. The Board also considered an external review into the
major outage of this system last October. The Bank will publish next week the targeted assessment and
the external review, alongside its response.
- Pricing of New Payments Platform (NPP) services.
The Bank will apply the same principles to the wholesale pricing of NPP transactions as it
has applied to competing payment systems. In particular, interchange fees should not be set
at a level that inhibits the efficiency and competitiveness of the payments system, and they
should be published to provide transparency. The competitive implications of linking the
pricing for one payment system with another payment system, and volume-based discounts,
should be carefully considered.
- Competition in the debit card market. Currently, dual-network debit cards in Australia are issued
with one network on the card having priority. As a result, contactless transactions automatically
route to that network, unless the merchant has choice through least-cost routing. The Board is
considering taking regulatory action to prohibit card schemes and issuers from setting a default
routing network on dual-network debit cards. This would ensure that merchants can choose which
network processes their debit transactions. The Bank will consult on the costs and benefits of such
- Improving the security of debit card transactions in the online environment. The tokenisation of
dual-network debit cards has the potential to reduce the damage caused by cyber-attacks by reducing
reliance on databases of card numbers. The Board discussed some impediments that are preventing the
full security and efficiency benefits of tokenisation from being realised. The Bank will set some
expectations for industry to address these impediments, with the aim of substantially reducing the
reliance of merchants and payment service providers on databases of card numbers by the end of 2024.
Following further consultation with industry, the Bank will publish detailed guidance on the steps
that need to be taken and the deadlines for their completion.
- The results of the Banks 2022 Consumer Payments Survey. Members noted that the decline in the
use of cash for consumer payments had accelerated following the pandemic. Consumers now use
contactless card and mobile device payments for most of their in-person payments. At the same time,
some members of the community continue to make the majority of their payments in cash. The main
findings of the survey will be published in the June RBA Bulletin.