Source link – Reserve Bank of Australia

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

  • The technology outage at the Reserve Bank on 12 October that disrupted the payments system. The
    Board has requested that the Bank commission a wide-ranging and comprehensive external review of the
    incident and the Bank’s operational risk environment with respect to the Reserve Bank
    Information and Transfer System (RITS). The Board also supported the Bank’s plans to publish the
    full incident report that has been provided to the industry and to publish quarterly operational
    reliability statistics for its retail payment settlement services. In addition, as supervisor of
    systemically important payment systems, the Bank’s Payments Policy Department will undertake a
    targeted Assessment of RITS to determine whether further actions are necessary.
  • ASX’s decision to pause and reassess all aspects of the CHESS replacement project. Members
    discussed the serious shortcomings of ASX’s management of the project and emphasised the
    importance of ASX developing a safe and reliable clearing and settlement system for Australia’s
    cash equities markets. The Bank is actively engaged in discussions with ASIC about a joint regulatory
    response to the issues highlighted in the independent report. The regulators expect ASX to maintain
    and support current CHESS so that it continues to operate reliably until a new system is put in
    place.
  • Cyber resilience at payments and market infrastructures. Members discussed the recent high-profile
    data breaches in the Australian corporate sector, and the various initiatives underway to strengthen
    the cyber resilience of Australia’s financial institutions.
  • Payments system regulatory reform. Members discussed the development of a set of common access
    requirements to help facilitate payment service providers’ access to payment systems, while
    promoting the safety of those systems. The common access requirements could form part of the
    licensing framework for payment service providers seeking direct access to payment systems.
  • Competition in the debit card market. The Board strongly supports making the debit card market more
    efficient and competitive through the least-cost routing (LCR) of dual-network debit card
    transactions. Following the Bank’s discussions with industry participants, the Board considers
    it to be both feasible and desirable for the industry to deliver LCR functionality for mobile wallet
    transactions by the end of 2024. It is requesting that the mobile wallet providers inform industry of
    the designs of their LCR solutions as soon as possible. The Board also expects that merchant choice
    of debit network would be the default setting in the mobile environment, although it has a strong
    preference for consumers to also have some ability to choose their preferred debit network.
  • Card payments regulation. Members reviewed the compliance of card issuers and the designated card
    schemes with the Bank’s interchange standards and access regimes in 2021/22. Overall, there was a high level of compliance with the
    Bank’s regulations.
  • The ‘Instalments’ services being proposed by the international card networks. These
    services would enable buy now, pay later transactions to be processed through the card networks. The
    Board expects that from the launch of these services, merchants will be provided with: (1) a choice
    of whether to accept Instalments transactions; (2) clear information about the costs of accepting
    Instalments transactions; and (3) the ability to fully surcharge these transactions if a merchant
    wishes to recover the costs they incur. If these expectations are not met, the Board would consider
    the merit of taking regulatory action including on the issue of ensuring merchants have choice of
    which products to accept. The Bank will continue to monitor closely the implementation of these
    services.
  • Enhancing cross-border payments. Members discussed the work that is underway in Australia to make
    cross-border payments faster, cheaper and more transparent. The Board emphasised the importance of
    the industry adopting new functionality and messaging capabilities for cross-border payments over the
    coming years. It expects that NPP participants meet their commitment to deliver the NPP international
    payments business service by December 2023. This will help speed up cross-border payments coming into
    Australia, by enabling the final Australian dollar leg to be processed via the NPP.
  • Research on central bank digital currency (CBDC). The Board discussed progress with the research
    project exploring use cases for a CBDC in Australia. The Board welcomed the significant interest from
    industry in participating in the project, with a large number of use case submissions having been
    received. The project is in the process of selecting use cases to take forward to the pilot early
    next year.



Source link – Reserve Bank of Australia