Last month’s release of the Australian Payments Plan (APP) signals big changes for the Australian economy – but what does it actually mean? Watch: Mark Birrell, Chair of the Australian Payments Council, explains what the Australian Payments Plan is and how it will foster the evolution of payments. We spoke…
Many in our industry are watching in fascination as the United States inches towards a real-time payments solution. There are three recent developments: the Fed’s Faster payments task force has defined effectiveness criteria for a new payments system, NACHA has received the Fed’s approval for its same day ACH rule, and most interestingly, The Clearing House – the high value clearing network for the larger banks – has announced a letter of intent with Vocalink to develop a new real-time system.
Judging by the Chicago Payments Symposium hosted by the Chicago Fed last month, there is still nothing like consensus on the “right” outcome, and the US is still some years from new mainstream payments services that are “cloud ready”.
Does Australia’s New Payments Platform hold some lessons for developing countries looking to design their own digital payments system? The Level One Project Guide, released earlier this year by the Bill and Melinda Gates Foundation, would suggest so.
The Bill and Melinda Gates Foundation is one of the world’s most influential NGOs. It supports numerous initiatives, primarily aimed at health and economic development in developing countries. An area of interest for the Foundation has been financial inclusion, with a particular focus on how new digital technologies, such as mobile phones, can be used to provide low cost and accessible payment services to the poor.
Here at APCA, one of our jobs is to ensure that the community is well informed about payments systems and their future evolution. We were therefore very interested in recent industry media commentary on the evolution of new payment technologies and, in particular, the progress of Apple Pay in Australia.
Australian payment institutions have been criticised by some in the local media for not getting together to make Apple Pay happen. I am not privy to any commercial discussions (of course), but that is a little surprising. There just might be legitimate pro-competitive reasons for that not happening – they are competitors and given Apple’s market weight, they will doubtless have a significant effect on competitive dynamics. This bears careful thought.
Billions of people, primarily in developing countries, have historically had neither bank accounts nor access to electronic payments. When saving and making payments, they have had to rely on cash.
This is rapidly changing. According to the recently-released World Bank Global Findex, in 2014, 62 per cent of the adults worldwide had a formal account with a financial institution or mobile money service – a dramatic increase from 51 per cent in 2011.
This upswing in financial inclusion has been facilitated by a growing middle class in many developing countries and easily available technology, in particular the mobile phone. However this growth has taken a different path in different regions.