Sibos 2018: Death of the cheque in RBA’s sights – finally

Written by FinTech Futures
23rd October 2018

A senior Reserve Bank of Australia (RBA) executive has predicted the end for cheques, as Australia’s New Payments Platform (NPP) facilitates a consolidation of the payments system.

Addressing the audience at the day two Sibos session on the future of real-time payments in Australia, RBA assistant governor Lindsay Boulton said there “has to be rationalisation [and it] doesn’t make sense to use multiple clearing streams – some clearing streams may be absorbed into the NPP”.

This is a panel discussion, not a meeting of Spectre

Boulton cited research that found less than a quarter of a percent of payments are presently done with cheques and that number is shrinking. He said the Australian Payments Council is looking into the future for cheques.

“We could actually set a date for closing down the cheque system – we’re not at that point yet … but we’re probably not too far away,” he said.

Having only been launched in February 2018, it’s still early days for the NPP and panel members explored future uses for it.

Karen Webb, the Australian Securities Exchange’s senior manager, equity post trade services, told the audience the NPP has application for real-time payments for the exchange for securities lending, non-listed managed funds known as MFunds, funds distribution and corporate actions.

Banks are also doing substantial work understanding the NPP’s application for their customers.

“I keep saying the fast part [of the NPP] is not that interesting – but it is becoming interesting to some clients,” said Rachel Slade, chief customer experience officer, National Australia Bank (NAB).

Slade said the bank is exploring the NPP’s application for making payments on weekends and after 4.30 pm and is running a pilot with Swift. Cross-border payments, payments made in the gig economy and disaster payments are other opportunities.

Boulton confirmed the “government has been very interested in using the NPP from the start”. He said it makes 2,000 emergency payments each day, for instance to people suffering domestic violence, and it’s looking to migrate this service to the NPP. The Australian Taxation Office is also exploring the NPP’s use for requests to pay and the federal Department of Human Services is studying its application for welfare payments.

Panel members acknowledged they would approach some aspects of the NPP differently if they had their time again.

“At Westpac, we try to do everything perfect on day one but sometimes it’s more important to develop a minimum viable product … we should have delivered a modular project rather than tried to boil the ocean,” she said.

Reflecting on the NPP’s journey, panellists were positive about its future and potential to prompt efficiencies in the payments system.

Said Boulton: “it’s living up to its purpose – we’ve only just started on the journey but so far the signs are good.”

By Daily News at Sibos contributor Alexandra Cain

This article is also featured in Daily News at Sibos 2018, our flagship daily publication at the Sibos conference.
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