At its meeting today, the Payments System Board discussed a number of issues, including:
- CHESS batch failure incident. Members discussed the issues that contributed to the CHESS batch failure incident on 20 December 2024. The Board viewed the disruption this caused to clearing and settlement of cash equities as a major operational incident. As the RBA had highlighted for some time that ASX's aging assets, including CHESS, were raising the risk of operational disruptions to critical financial infrastructure, members viewed the incident as deeply disappointing and resolved to take regulatory interventions to provide assurance that the ASX addresses related risks as a matter of priority. Further details on the RBA's regulatory response to the incident will be published by the end of March.
- Developments in the account-to-account payments system. The Board discussed the risks associated with the Australian payments industry's intended decommissioning of the Bulk Electronic Clearing System (BECS) by a target date of 2030. BECS is currently Australia's primary system for account-to-account payments - Australians rely on BECS for a wide range of critical payments including welfare, pension, salary and bill payments. The Board endorsed a set of recommendations designed to address the significant risks and challenges identified by the RBA.
- Review of Retail Payments Regulation. The Board considered the arguments for and against various policy options on merchant card payment costs and surcharging, informed by a wide range of views from stakeholder submissions. The Board is actively exploring options to promote the public interest by supporting safety, competition and efficiency in the payments system. Members agreed to release a consultation paper in mid-2025 that will outline the Board's preferred policy options and seek further feedback.
- International and domestic work on central bank digital currencies. Members discussed the ongoing program of international and domestic research on CBDCs. Domestically, the RBA has a collaborative research project underway, Project Acacia, which is investigating how innovations in wholesale digital money could support tokenised asset settlement. The project team is currently reviewing expressions of interest from industry participants wanting to collaborate in the testing of settlement models as part of the applied research phase taking place this year. An Industry Advisory Group has also recently been launched to support the project. Members also discussed the Bank's plans to use focus groups to explore whether there are unmet payment needs that could be satisfied with a retail CBDC in Australia. This work is expected to take place in the second half of the year.
Members agreed that the foundational next steps for industry should include: defining a vision for the target future state and strategic objectives for account-to-account payments in Australia, in collaboration with the Government and the RBA; comprehensive consideration of options for achieving that target future state; and establishing appropriate mechanisms for coordination and stakeholder engagement. A report detailing the findings and recommendations of the RBA's risk assessment will be published later in March. Members requested an update on industry's progress in implementing the recommendations in a year's time.
Members also discussed end-user costs for account-to-account payments in Australia, which highlighted potential impediments that end-users would face if they had to migrate away from BECS. Members agreed that greater pricing transparency was required from providers of these services to end-users. They expressed support for the RBA establishing a robust pricing data collection to support future policy deliberations.
