Bridging the payments gap Down Under. Photo: Flickr
From banks to businesses to consumers, Australia has fully embraced the potential of smarter, digital payment technologies.
Australia already has one of the most advanced payment ecosystems in the world, but unlike the US, where innovation is typically expected from spunky startups, this initiative has been led from within the banking industry.
Explains Amy Auster, Deputy Director at Australian Centre for Financial Studies:
The system – which most Australians will know as Eftpos (electronic funds transfer at point of sale), PayAnyone (online account-to-account transfers) and its compatriot BPay (online bill payments system) – are innovations created by a consortium of Australia’s major banks around the same time as PayPal’s founding in the US. Australian banks have remained competitive in this part of financial services.
Not to rest on its laurels, the industry in December announced that SWIFT would lead development of a real-time domestic payments solution called the New Payments Platform (NPP), what the Australian Payments Clearing Association has described as “financial plumbing for the economy of the future.”
This vision of open access infrastructure will initially be led by twelve founding members, which includes the country’s top banks and financial institutions. The arrival of NPP in 2017 will put Australia in the same league as financial centers like the UK in terms of core payments infrastructure.
Such ongoing developments in the payments space are in line with general business needs and expectations. According to a March study conducted by Roy Morgan Research, almost half of Australian businesses already accept electronic payments through digital wallet services, and two-thirds of those businesses perceive smarter payments as being “extremely” or “very” critical to their business.
“I think whether it’s an individual customer or a small business or corporates or government, basically, people are looking for payments to be fast, easy and secure,” said Paul Lahiff, the chairman of the NPP.
Australia’s collective strength in finance and banking will set it up as a hub for innovation in Asia-Pacific along with Singapore, according to reports from both KPMG and Deloitte—a beneficial position given the region’s robust trade growth, which the IMF expects to continue.
Expanding regional trade would, of course, be supported by cross-border payments, one area Auster admits is still lagging, noting on Monday that the “gap in the payments space is in international money transfers.”
But given Australia’s collective and constructive approach to payments thus far, it’s unlikely that gap will remain for long.