Payments System Board Update: November 2024 Meeting

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

• Assessment of the New Payments Platform. The Board reviewed the RBA’s inaugural assessment of the New Payments Platform (NPP) under the Prominent Payment Systems oversight regime. It considered the effectiveness of governance, the risk management framework and operational risk management of the NPP, operated by Australian Payments Plus. Members discussed the importance of continued focus on high levels of operational resilience and effective stakeholder engagement in light of industry’s intended migration of the majority of account-to-account payments to the NPP in the medium term.
• The RBA’s work to operationalise the Financial Market Infrastructure regulatory reforms. Members discussed the workplan for the RBA’s crisis response framework for clearing and settlement facilities. This included plans to release public guidance on clearing and settlement facility resolution by the end of 2025. Members also received an update on the initial resolution planning for domestically located central counterparties.
• Central clearing of Australian bond and repo markets. Members received an update on the feedback received from industry in the Council of Financial Regulators’ (CFR) public consultation. The Board discussed some of the policy challenges being considered by the CFR agencies. A report that summarises stakeholders’ feedback to the consultation and the CFR’s response is expected to be published in the first half of 2025.
• The annual review of compliance with card payments regulation. Members reviewed the compliance of card issuers and acquirers, and the designated card schemes, with the RBA’s interchange and surcharging standards and access regimes in 2023/24. There was assessed to be a high level of compliance with the RBA’s regulations.
• Improving the security of card transactions in the online environment. The Board continues to expect all relevant industry participants to support the portability of both scheme and proprietary tokens. Members welcomed AusPayNet’s progress in developing a technical standard to support token portability to promote security, efficiency and competition in the payments system.
• Enhancing cross-border payments. Members discussed the Australian payments industry’s progress on several priority cross-border payments initiatives. These include implementation of the Australian Competition and Consumer Commission’s best practice guidance for international money transfer providers, and the migration of incoming cross-border payments to the NPP’s International Payments Service. The RBA will monitor and report to the Board on the adoption of internationally harmonised ISO 20022 requirements for cross-border payments by the High Value Clearing System and the NPP by the end of 2027. Members emphasised that the timely implementation of these initiatives will enhance the cost, speed and transparency of cross-border payments for end users and help Australia meet its commitments under the G20 roadmap. Members particularly noted the importance of addressing challenges in cross-border payments in the region.