NPP Australia has provided a submission to Treasury’s Review of the Australian Payments System. Available to be downloaded here, it articulates the view that overall, the current regulatory architecture is working well, but there are some opportunities for improvements and refinements.
The payments system regulatory architecture is meeting the core objectives of safety, security and stability, while also promoting efficiency and competition.
The creation of the NPP itself illustrates that much can be achieved under self-regulation and the industry working together to drive change that is in the public interest.
One area, however, that needs addressing is regulatory licensing which has been outstanding for some time. The Stored Value Regulation (SVR) process provides some instructive insights in relation to this issue and what might be required going forward.
Further strengthening the Payments System Board, elaborating the government’s payments policy expectations from the RBA and elevating the role of Treasury in areas beyond the RBA’s remit, would also provide additional benefits.
There would also be merit in making specific improvements to certain payments-related areas in a bid to remove current sources of friction such as sanctions.
In NPP Australia’s experience, driving competition and innovation is not a regulatory issue but rather one of capability deployment and creating the required network effect.
Indeed, the NPP’s Mandated Payments Service (which enables third party payment initiation) will drive innovation in real-time account-to-account payments and is the most frequently requested capability from the market.