BPAY sees payment consolidation as "perfect timing"
The decision to assess the viability of a consolidated domestic payments system is perfect timing for the payments industry and for BPAY there is recognition that there is a need to evolve to keep abreast of both global competition and innovation.
This is the assessment of BPAY CEO John Banfield.
Last week, it was announced in a media statement that a working group will be created that will assess the potential for consolidating three domestic payment schemes including the NPP, BPAY and eftpos.
The working group will include s a structured, independent forum, with a legal foundation, in which the 22 shareholders of the three organisations will be invited to participate in assessing the viability of a single payments scheme.
It was a move already signalled by the Reserve Bank governor last year.
“It is perfect timing for us in terms of the payments landscape, because we need to quickly evolve as a local payments industry given the pace of innovation and potential global threats,” Banfield said.
“I think that this is a great move in terms of being able to think about how we promote and get not only efficiencies, but how we can operate more sustainably, in order to provide the right kind of outcomes for all stakeholders including everyday Australians.”
This [announcement] provides a far more coordinated approach where all the banks including all the stakeholders can move faster on rolling out innovations
In its payments review, the central bank has previously highlighted that this kind of development is not without precedent, with similar consolidation of domestic payments infrastructure driven by the UK Payment System Regulator in 2017, and a market led approach by Singapore.
BPAY has previously signalled concerns about a shift towards the domestic consolidation of payment schemes.
However, going forward, Banfield said that while there are lessons to be learned from overseas experience, it remains a positive move for BPAY to help initiate and evaluate the viability moving towards a single payments scheme.
“I think it is important to get to a more sustainable domestic payments network, one that potentially lowers costs, is easier to manage and creates innovation.”
Here, Banfield spoke about the challenges of moving forward on innovation given the “competing priorities” of BPAY and other businesses such as eftpos, the NPP and other schemes.
“This means there are all different innovations that we want the banks to implement. That is pretty unfair on the banks.
“This [announcement] provides a far more coordinated approach where all the banks including all the stakeholders can move faster on rolling out innovations.”
In terms of its own initiatives, it has a majority ownership in Sypht – an AI business that reads documents.
[We have a holdco [holding company structure] much the same as what the media announcement was suggesting, which was set up to help us think about how we can diversify our business.”
One of the initiatives planned to be rolled out under this structure is in the area of digital ID but Banfield could not provide more information because of non-disclosure agreements.
“It's a very big initiative for us that we're focused on, which is very much a part of our strategy.”
On the topic of the health pandemic, Banfield said business remains well –positioned to cater for changing consume preferences on payments with volumes still well above last year numbers but we also are “very much managing our business very cautiously”.