Push to speed up banking transactions
The RBA wants to set up a senior-level body called the Australian Payments Council to encourage banks and merchants to work together to change the system.
The system covers most day-to-day transactions, ranging from credit and eftpos cards to ATMs and bank accounts. It provides the financial plumbing for the economy.
The proposal comes after the Payments System Board - which is charged with promoting efficiency and competition in the payments system - acknowledged last year there were "inherent challenges" in getting industry participants, mostly banks and retailers, to co-ordinate properly on important issues facing the industry.
The lack of co-ordination has often stifled innovation. When it comes to issues such as "real-time" banking, the lack of co-ordination has left Australia lagging other countries, which have faster payment systems. The RBA has become increasingly frustrated with the inability of existing players to reach agreement on the best way to speed up banking transactions. It wants all banks to be able to make real-time payments by the end of 2016.
In a joint paper on Monday, the RBA and the Australian Payments Clearing Association said the proposed council would help to generate "common industry positions" on important issues that could be recommended for adoption by the industry.
Frequently Asked Questions about this Article…
The Reserve Bank proposes to establish the Australian Payments Council, a senior-level body aimed at encouraging banks and merchants to collaborate on improving the payments system, which includes credit cards, eftpos, ATMs, and bank accounts.
The Australian Payments Council is being proposed to address the lack of coordination among banks and retailers, which has stifled innovation and left Australia behind other countries with faster payment systems.
The current lack of coordination among industry participants, mainly banks and retailers, has hindered the development of real-time banking and other innovations, causing delays in transaction speeds.
The Reserve Bank aims for all banks to be capable of making real-time payments by the end of 2016, addressing the current delays and inefficiencies in the payments system.
The joint paper proposing the Australian Payments Council was released by the Reserve Bank of Australia and the Australian Payments Clearing Association.
The Australian Payments Council will focus on generating common industry positions on important issues, such as real-time banking, to recommend for adoption by the industry.
The payments system is crucial for everyday transactions as it includes the financial infrastructure for credit cards, eftpos, ATMs, and bank accounts, facilitating the flow of money in the economy.
The Payments System Board has identified inherent challenges in getting industry participants to coordinate effectively on important issues, which has been a barrier to improving the payments system.
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