© Reuters. FILE PHOTO: Two women walk next to the Reserve Bank of Australia headquarters in central Sydney, Australia February 6, 2018. REUTERS/Daniel Munoz/File Photo
SYDNEY (Reuters) – Australia’s central bank is considering a slate of new regulations for the payments system to open up the use of mobile wallets, make costs more transparent and allow retailers to put surcharges on buy-now-pay-later services.
In a speech on Friday, Reserve Bank of Australia (RBA) Governor Michele Bullock also outlined efforts to support the struggling business of moving cash around the country and plans to modernise the direct entry system used for salaries and welfare payments which will involve much investment by banks.
The Australian government is greatly expanding the RBA’s regulatory power over the payments system, particularly for mobile wallet services offered by the likes of Apple (NASDAQ:) and Google (NASDAQ:).
Bullock said the powers should be in place sometime next year, allowing the RBA to launch a broad review of the retail payments system.
“Usage of mobile wallets has grown rapidly, but the costs associated with these services remain opaque and payment service providers can face barriers to access,” she added. “We will need to consider whether regulatory action is needed in this area.”
It will also consider formal regulation to allow retailers to place surcharges on BNPL services, much as they do on credit cards.
Regulation might also be needed to ensure retailers have access to least-cost routing, which financial institutions have been slow to roll out, Bullock said.
The RBA will continue its work on a central bank digital currency (CBDC) and is planning a project to examine how different forms of digital money and infrastructure could support the development of tokenised asset markets in Australia.
It will also support the transition from the venerable Bulk Electronic Clearing System (BECS) to the New Payments Platform (NPP), while expanding the NPP’s use for cross-border transactions.
Bullock noted that financial institutions would need to connect to the NPP all relevant accounts that currently send and receive payments via BECS, which processes around three-quarters of non-cash payments by value and is heavily relied on by many businesses and government agencies.
“Completing this will take considerable investment and time,” Bullock said. “It is important that work begins now to ensure that end users are not disrupted when BECS is retire.”
