Media Release Payments System Board Update: August 2017 Meeting

At its meeting today, the Payments System Board discussed a number of issues, including two relating to the ATM industry.

• The conclusions from an industry consultation on the future of the ATM Access Code and Access Regime: the Board noted the industry's planned process to review and update the access framework, and encouraged the industry to develop a roadmap for the transition to self-regulation.
• An application to extend Exemption No 1 of 2012 to allow certain banks and ATM deployers to continue to provide fee-free access to ATM services in certain very remote Indigenous communities: members gave their in-principle approval for the exemption to be extended for five years, subject to the outcome of a corresponding ACCC authorisation application by the same parties.

The Board discussed the role that digital currencies could potentially play in the payments system. It noted recent international work on whether there might be a demand for ‘digital cash’ issued by central banks and, if so, what form it might take. Members agreed that the Bank should continue to consider the technical and policy issues associated with digital cash.

The Board also discussed the issues associated with the development of a digital identity framework in Australia. Members noted the potential for a framework for trusted digital identity to make online interactions more convenient and secure, including the potential to reverse the rise in fraud rates on card transactions. Members encouraged the payments industry to work collaboratively on digital identity and also noted the importance of engagement between banks and government on this issue.

The Board was briefed on the recent reset of interchange fees in the MasterCard and Visa systems, including the reduction in debit card interchange rates to meet the lower benchmarks implemented following the Bank's 2015–16 Review of Card Payments Regulation. These changes mean that interchange payments on many transactions will have fallen, particularly for transactions at smaller merchants that previously faced higher interchange rates on their transactions. The reduction in interchange payments can be expected to be reflected in lower merchant service fees for these merchants from 1 July.

Members reviewed the outcome of the Bank's formal 2016/17 assessment of the four ASX clearing and settlement facilities. The assessment will be published after it has been provided to the Assistant Treasurer and the Australian Securities and Investments Commission.

The Board also reviewed its forthcoming 2017 Annual Report, which will be published once it has been tabled in Parliament. The Board also noted the annual review of compliance with its policy on management of potential conflicts of interest arising from the Bank's commercial activities.

The Board is meeting this afternoon with the Australian Payments Council.