Digital economy spurs Australian Payments Council to launch review of payments system

  • By Christine St Anne

The Australian Payments Council (APC) has launched a triennial review of its payments plan as the sector continues to embrace change and innovation.

The APC guides the strategic direction of the payments system, in conjunction with the Payments System Board of the Reserve Bank of Australia (RBA).

The initial plan was developed in 2015, in consultation with a wide range of public and private stakeholders.  

The plan acts as a roadmap for industry collaboration and while it has guided the payments sector, over the last three years policy initiatives around open data and the changing payments mix has spurred APC to review its plan, preparing the payments system for the digital economy.

“The roadmap was always intended to be reviewed after three years, taking into account that the payments sector continues to evolve,” APC chair Robert Milliner told AB+F.

“Taking into account the views of all users, the review will uncover what needs to be done in order to ensure the payment system supports our future needs,” he said.

That is why this month the strategic body is launching the consultation paper, Payments in a global digital world. It outlines challenges that have emerged or intensified over the last three years and suggests new ideas for industry collaboration

“The consultation paper includes suggested areas of focus such as the impact of new technology, globalisation of payments, financial crime and social inclusion.

“We will be seeking views from all stakeholders including businesses, government, non-government organisations and consumer groups to help identify areas where collaboration can add most value to the changing payment needs, while continuing to support competition and innovation.”

APC’s focus on supporting digital identity – an initiative that also has the support of the RBA and Digital Transformation Agency is one area where this collaboration could play out.

New priorities

In fact, the strategic body has adopted a design-led approach to developing solutions that will address the security and trust needs of consumers.

“Adopting a design-led approach puts the customer at the center of everything we do rather than adopting a theoretical one.

“This approach allows us to find the best balance between what is commercially viable, technically feasible and importantly desirable from a customer point of view,” Milliner said.

The intention is for multiple service providers to offer different solutions that address a range of use cases. For example, a service might make it easier – in terms of convenience and security - for a customer to share identity verification information online.

In terms of priority areas, Milliner noted that the initial plan focused on mainstream issues in the payment mix like the declining use of cheques.  

The Council has examined ways in which to support this consumer-led transition away from cheques to ensure the payments system enables access to the digital economy for all Australians.

New priorities for the APC include technological developments that drive customers to use digital payments.

Milliner points to a number of statistics that highlight this shift.

Over the last three years, cheque numbers have fallen a further 47 per cent dropping to 80 million in 2018 after another 20 per cent year-on- year drop. Cash use is also falling, with one in five people over 18 holding no cash at any given time.

By contrast, card use has grown by more than 40 per cent over the last three years to reach 8.8 billion transactions in 2018, and Australia leads the world in contactless payments. Almost 90 per cent of people own a smartphone, and mobile payments are taking off.

As part of the consultation, workshops will be held in Sydney and Melbourne.

“Payments touch everyone and we encourage all sections of the community to get involved to help ensure the payments system continues to meet the changing needs of Australians,” Milliner said.

The Consultation Paper is available on the APC website. The consultation is open until Friday, 22 February 2019.