Modernising Australia’s Payments System: A Strategic Overview

⚡️ Highlights:

1. The Reserve Bank of Australia (RBA) will conduct a comprehensive review of retail payments regulation in 2024. This review will consider the regulation of newer players in the payments system, such as ‘buy-now-pay-later’ providers, payment gateways, payment facilitators, and mobile wallet providers.

2. The review will focus on specific issues, including least-cost routing (LCR), mobile wallets, and buy-now-pay-later (BNPL) services. Formal regulation may be required to ensure competitive pricing and access to these payment methods.

3. The RBA is committed to maintaining access to cash for Australians, despite the declining use of cash for payments. The RBA recently convened discussions with industry participants to promote the sustainability of the cash distribution system.

4. The industry is planning to transition from the Bulk Electronic Clearing System (BECS) to more modern payment systems. BECS has limitations compared to newer alternatives such as the NPP, and the industry plans to retire the BECS framework by 2030.

5. The transition from BECS to modern payment systems will require financial institutions to connect relevant accounts, address cost considerations, ensure reliability of services, and find efficient ways to process bulk payments. The RBA will review end-user costs and monitor industry efforts to ensure a smooth transition. Improving the reliability of NPP services will be a major focus for the RBA.

Governor Michele Bullock Addresses the Australian Payments Network Summit

In a recent speech at the Australian Payments Network Summit in Sydney, Michele Bullock, Governor of the Reserve Bank of Australia, discussed the rapidly evolving payments landscape and the need for modernising Australia’s regulatory architecture and payments infrastructure. The speech highlighted the Payments System Board’s strategic priorities and key issues for 2024, reflecting the Board’s response to the changing environment in the payments system.

Strategic Priorities of the Payments System Board

The Payments System Board has updated its strategic priorities to address the changes in the payments system and regulatory landscape. These priorities include:

  1. Strengthening the Resilience of Payment and Market Infrastructures: With businesses and consumers increasingly reliant on electronic payment systems, the Board is intensifying its oversight, especially of the New Payments Platform (NPP) and card schemes.
  2. Advancing and Implementing Government’s Payments Reforms: These reforms aim to modernise the regulatory architecture, ensuring the RBA can continue to promote a safe, efficient, and competitive payments system.
  3. Promoting Competitive, Cost-Effective, and Accessible Electronic Payments: The Board expects payment service providers to assist merchants in reducing payment costs and financial institutions to deliver more fast payment capabilities through the NPP.
  4. Enhancing Cross-Border Payments: Australia is collaborating with G20 countries to make cross-border payments more efficient. This includes standardising messages associated with these payments and implementing the NPP’s International Payments Business Service.
  5. Shaping the Future of Money in Australia: The RBA is exploring the potential use cases for a central bank digital currency (CBDC) and examining how different forms of digital money could support the development of tokenised asset markets in Australia.

Key Issues for 2024

For 2024, three key issues were highlighted:

  1. Comprehensive Review of Retail Payments Regulation: With the RBA’s regulatory remit soon to be expanded, a holistic review of retail payments regulation is planned, focusing on transparency, freedom of payment method choice, and the ability for businesses to pass on payment method costs to end users.
  2. Maintaining Access to Cash: Despite the decline in cash use for payments, cash remains crucial for certain segments of the population and as a backup payment method. The RBA is committed to ensuring continued access to cash withdrawal and deposit services.
  3. Transition from BECS to Modern Payment Systems: The industry’s plan to transition from the Bulk Electronic Clearing System (BECS) to more modern payment systems by 2030 poses significant challenges. Financial institutions will need to connect all relevant accounts to the NPP, and the industry will need to address cost differences and ensure reliable processing capacity.


Governor Bullock’s speech underscores the RBA’s commitment to modernising Australia’s payments system in response to technological advancements and changing consumer needs. The strategic priorities set by the Payments System Board and the key issues for 2024 reflect a proactive approach to ensuring a safe, efficient, and competitive payments landscape in Australia. The RBA, along with industry and government stakeholders, is poised to navigate these challenges in the interests of the Australian public.

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