Tony Richards, the department head, and David Emery, a senior manager, from the RBA’s payment policy department recently appeared before a parliamentary committee to present an overview of Australia’s evolving payment system. They noted that the key trend in the retail payments system has been the move from paper-based payment methods to electronic methods. The adoption of e-payment methods is likely to increase as consumers use contactless cards and mobile devices to make more payments. This move will be accelerated with the introduction of the New Payments Platform (NPP). The NPP will facilitate the inclusion of far more data with each payment, enhancing functionality for government agencies and improving e-invoicing and straight-through-processing. The NPP is also targeted for use by non-traditional members of the financial system such as fintechs.
Notably, Tony Richards stated that cryptocurrencies did not currently pose “pressing regulatory issues” for the RBA’s payments policy mandate. While cryptocurrencies have been used as both a legal and illicit payment method, the RBA considers regulation of the core protocols of these systems “unlikely to be effective” due to their cross-border nature. In contrast, the RBA has been exploring the potential for distributed ledger and blockchain technology in the financial sector (previously discussed here). Tony Richards observed that the greatest areas of use for this technology are “sectors where workflows involve lots of different parties with no trusted central entity, and where current practices are quite inefficient”, such as correspondent banking and remittances, and trade financing.