In early 2023, Zepto made a submission to Treasury's Consultation Process on a Strategic Plan for the Payments System. On 07 June, Treasurer Jim Chalmers presented the government's plan to the Australian Banking Association, kicking off generational reforms to payments in Australia.
Zepto's submission opened with a simple proposition: Treasury’s Strategic Plan should be a plan to make the Australian payments ecosystem the very best in the world.
We believe that Australia is uniquely positioned to achieve this. First, we have the infrastructure in place with the establishment of the New Payments Platform. Second, we have a population of early adopters who are driving demand for new and better payment solutions from their service providers. And third, businesses are increasingly looking at payments as a way to reduce costs as inflation bites.
We called out that the key principle for Treasury’s Strategic Plan for the Payments System should be 'accessibility', and specifically to provide for common access requirements to Australia’s payments rails.
Today, the plan was released by Treasurer Chalmers in an address to the Australian Banking Association. Zepto wholeheartedly supports its vision to create a “modern, world-class and efficient payments system that is safe, trusted and accessible, and enables greater competition, innovation and productivity across the economy.”
In his address, the Treasurer said:
"Let’s be blunt. Our regulatory frameworks and infrastructure have not kept up with the big trends and transitions happening in finance — especially when it comes to the digital economy and payments."
JIM CHALMERS, TREASURER
"Our policies and regulations predate the development of mobile payments. The infrastructure that a lot of businesses and governments use for functions like payroll – the Bulk Electronic Clearing System – is clunky, inefficient, and cumbersome to maintain.
"And we haven’t had a coherent, sensible strategy to phase out costly means of exchange, like cheques – Something that’s already been achieved in other economies like ours.
"Our strategy, our agenda, is to address and resolve these issues, to remove the barriers that are inhibiting the development of a modern payments system. But our plan for payments is about a lot more than triaging the problems we face now, or playing catch‑up and patch‑up. It’s about setting us up for the future," added Chalmers.
Today's update from the Treasurer is incredibly important to the strategic outlook for payments in Australia.
We are delighted to see the government putting competition for pricing services, efficiency around payment services, access beyond the banks to the payment rails, and governance at the core of these reforms. This completely aligns to our strategic vision at Zepto to be an Australian payments infrastructure player.
The strategic plan has five objectives:
- Promoting a safe and resilient system by reducing scams, strengthening cyber-security, and updating the RBA’s supervision frameworks.
- Updating the payments regulatory framework to implement changes to the Payments Systems [Regulation] Act, establishing a new payments licensing framework, promoting more competition by facilitating transparent access to payments systems and enabling greater collaboration amongst payments system regulators, plus reducing small business transaction costs.
- Modernising payments infrastructure by phasing out cheques and supporting the industry’s transition from the old clearing system known as BECS to the New Payments Platform.
- Uplifting competition, innovation and productivity by aligning payments reform with other parts of our agenda for the digital economy including the Consumer Data Right, Digital ID, skills, and AI agendas.
- Leading in global payments, including through our work in the G20 and the Pacific to improve the availability of fast, low-cost international transfers and piloting a central bank digital currency.
A highlight of the Plan is the proposed establishment of a new payments licensing framework that will:
- Ensure fair and consistent regulation of payment service providers by regulating payment functions rather than payment companies, and tying regulatory obligations to the levels of risk posed to end-users.
- Promote competition by facilitating transparent access to payment systems for payment service providers.
- Improve regulatory certainty for payment service providers and streamline the process for businesses that require multiple licenses.
As the Treasurer said, payments are the tracks on which our economy runs. This means that improvements to payments infrastructure and regulation make everything move more efficiently.
We couldn't agree more.
The initiatives in the Strategic Plan represent generational reform to payments regulation in Australia, and Zepto looks forward to engaging with the Government on its implementation.
Download Treasury's Strategic Plan for Australia’s Payments System HERE.
Access the full transcript of Treasurer Chalmers speech HERE.
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