- The assessment of the ASX Clearing and Settlement Facilities. The Board approved the Bank’s 2018 assessment, which will be published after it has been provided to the Assistant Treasurer and the Australian Securities and Investments Commission.
- The ASX CHESS replacement consultation. Members were briefed on the system design and initial functionality that ASX is planning to offer for the distributed-ledger-based system that will replace CHESS (the system that is currently used to clear and settle Australian equities).
- The New Payments Platform (NPP). Members observed that the gradual rollout of the NPP is continuing and transaction volumes are picking up. Members discussed the fact that a number of the major banks have been slow to make the new system available to their customers. The Board expects the major banks to commit to bring on agreed functionality as soon as possible.
- The report by the Productivity Commission on Competition in the Australian Financial System.
- The Board discussed the Commission’s finding that interchange fees in card payment systems can distort incentives, leading to inefficient outcomes. It noted that the Board’s work in this area since the early 2000s has improved competition and efficiency in the card payments system. It also noted that regulation of the card payments system was reviewed in 2015/16 and that the impact of the new regulatory framework resulting from that review is still being observed. Members agreed that it was appropriate to undertake comprehensive reviews of the regulatory framework around every five years.
- The Board welcomed the Commission’s focus on the importance of holding down payments costs and banks providing merchants with the ability to route contactless dual-network debit card payments via the lowest-cost network.
- The Board discussed the Commission’s recommendation regarding access to the NPP. There are currently a number of different options available to entities wishing to access NPP services and around 60 small financial institutions have already connected to the NPP via aggregators. The Board has asked Reserve Bank staff to continue to monitor how access is working in practice and to ensure that new entrants to the payments industry are also able to take advantage of the functionality of this important new payments infrastructure.
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Productivity Commission on Competition in the Australian Financial System The industry’s work to combat card-not-present payment fraud (CNP). The Board noted the latest industry payment fraud statistics showing a further significant rise in CNP fraud losses in Australia. In this context, the Board welcomed AusPayNet’s publication of a draft industry framework to mitigate CNP fraud. The Board encourages participants in the e-commerce industry to continue to collaborate on this issue and to work with AusPayNet to finalise and implement a coordinated strategy to address rising CNP fraud as soon as possible.
- Recent developments in the ATM industry. Members noted that there had been some rationalisation of the ATM fleets of some banks and other deployers during the past year in the context of a continuing decline in ATM use. They agreed that consolidation or fleet rationalisation could result in a more efficient and sustainable ATM industry, but that policy concerns could arise if there was a significant decline in ATM coverage that made it difficult for people to access cash, particularly in remote or regional locations.
The Board also discussed drafts of the Bank’s 2017/18 assessment under the Regulator Performance Framework and the Board’s Statement of Intent to the Government.
The Board is meeting this afternoon with the Australian Payments Council.
