At its 15 February meeting, the Payments System Board of the Reserve Bank was briefed on a proposal to establish an industry based project to deliver a 'fast payments' solution for Australia.
The proposal was prepared by the Real Time Payments Committee (RTPC), an industry committee with representation from a range of institutions. The Board has welcomed the RTPC's proposal as making substantial initial progress towards meeting the strategic objectives established in the Conclusions of the Strategic Review of Innovation in the Payments System, released by the Bank in June 2012.
The Proposal aims to deliver on the strategic objectives by facilitating fast payments for consumers and businesses, with richer information, easier addressing and close to immediate funds availability to the recipient on as near to a 24x7 basis as practicable, by end 2016.
The members of the RTPC have proposed to establish a hub infrastructure operated by a collaborative mutual Clearing Utility. This will be capable of supporting the exchange of fast flexible payments messaging and will be linked to a Settlements Hub which the Reserve Bank has committed to build. The Clearing Utility is intended to link all ADIs as well as other approved participants. It will also provide for overlay services that can be tailored to particular payment needs, starting with an initial consumer-oriented 'convenience' service.
The Board expects that this structure will meet its objective of achieving general availability of fast payment services to account holders. In the event that this proved not to be the case, however, the Board would consider setting some minimum customer service standards for Clearing Utility participants.
The next major steps for industry will be to develop the detailed requirements for the infrastructure components and to undertake a selection process for their provision. The program of work will be overseen by a Program Steering Committee made up of senior industry representatives and representatives from the operational and policy arms of the Bank.
The Bank will continue close cooperation with industry to ensure that the Clearing Utility arrangements remain consistent with the Board's objectives and the public interest, with the aim of minimising the need for any future regulatory intervention. The Board considers it important that there be fair, open and transparent access to the Clearing Utility and welcomes the statement of intent by the RTPC members to work constructively with all institutions that join. The Bank will also need to be satisfied that the governance arrangements for the Clearing Utility are in the public interest and include appropriate representation by a number of independent directors. The Bank will be open to views expressed by relevant stakeholders not represented on the RTPC and may seek to have these reflected in the program as it evolves.