Media Release Payments System Board Update: May 2019 Meeting

At its meeting on Friday 24 May 2019, the Payments System Board discussed a number of issues, including:

• Least-cost routing of debit card transactions. The Board has been supportive of dual-network debit cards because they provide convenience and choice to both consumers and merchants and can help hold down payment costs. Reports from the Productivity Commission, the Black Economy Taskforce and the House of Representatives Standing Committee on Economics have all called for the industry to provide least-cost (or merchant choice) routing for contactless transactions to their merchant customers. A number of financial institutions, including two of the major banks, are now making this functionality available. The Board welcomed the progress that has been made to date and is expecting implementation shortly by the other major banks. It is also expecting that the banks will promote this functionality to all their merchant customers. The Board stressed that the benefits to competition from least-cost routing should not be prevented by issuers removing networks from dual-network cards.
• The Board also agreed that a holistic review of the regulatory framework for card payment systems will commence in early 2020.
• The consultation on the operation of the Bank's interchange standards. The Bank expects to publish the conclusions to the review within the coming week.
• The New Payments Platform (NPP). The Bank and the Australian Competition and Consumer Commission have recently completed their consultation into NPP functionality and access. The report from the consultation will be published in coming weeks.
• The Bank's assessment of Australia's real-time gross settlement system – the Reserve Bank Information and Transfer System (RITS) – against the relevant international standards. The Bank will publish this assessment in coming weeks.
• The Bank's approach for supervising clearing and settlement facilities. A policy statement setting out a revised approach will be published in the next month.
• Operational outages in retail payment services. The Board discussed evidence of an increase in disruptions over the past year and stressed the importance of having reliable retail payment services. It endorsed the Bank working with the industry and Australian Prudential Regulation Authority on a standard set of operational performance statistics to be disclosed by individual institutions.