Payments System Board Update: November 2021 Meeting

At its meeting today, the Payments System Board discussed a number of issues, including:

• The Bank’s Review of Banknote Distribution Arrangements. Members discussed the long-term decline in the use of cash for transactions and the pressure this was placing on the cash distribution system. As cash is likely to remain an important payment method for the foreseeable future, members agreed it was important that the community retained good access to cash withdrawal and deposit services. More broadly, the Board will continue to monitor access to cash services and trends in the use and acceptance of cash, including through the Bank’s Consumer Payments Survey to be conducted again next year.
• Recent government reviews and inquiries dealing with payments issues. Members discussed the recommendations in the Treasury’s Payments System Review and the recent Parliamentary committee reports on digital payments and mobile wallets and on Australia as a technology and financial centre. The Bank will continue to work with the Treasury and other members of the Council of Financial Regulators on policy or regulatory initiatives stemming from these reviews.
• Disclosure of new reliability statistics by retail payments providers. Members welcomed the increased transparency about retail payment service reliability. They observed the first quarter of data shows significant variation in outcomes across individual services and providers. The Bank will monitor trends in these data and engage with individual institutions as necessary about their operational challenges.
• ASX’s response to the recommendations in the Bank’s 2021 assessment of the ASX clearing and settlement facilities against the Financial Stability Standards.
• The Bank’s 2021 assessment of LCH Limited’s SwapClear service against the Financial Stability Standards. In Australia, SwapClear is considered systemically important, clearing around 90 per cent of centrally cleared Australian dollar over-the-counter interest rate derivatives. Reflecting this importance, the Board welcomed LCH Ltd’s plan to extend its operating hours in early 2022 to cover Australian business hours. The assessment will be published in early December.
• Card payments regulation. Members reviewed the compliance of card issuers and the designated card schemes with the Bank’s interchange standards and access regimes in 2020/21.