Unite the banks for a cashless country
THE Central Bank governor, Philip Lowe,
has called on the Australian Payments Council to unite the nation’s financial institutions behind a push to catch up with the international leaders in cashless payment systems.
Mr Lowe said the Reserve Bank of Australia would need to take regulatory action against relevant bodies and companies failing to work together to increase the safety and functionality of an electronic economy.
“We need everyone to get around the table and say there’s something we need to do in the national interest,” Mr Lowe said at the Australian Payment Summit in Sydney yesterday.
Without co-ordinated institutions, Mr Lowe said Australia would fall further behind a number of European countries, leaving consumers without access to new payment options.
“Everything is moving electronic, so maintaining the integrity of the identity system in the electronic world is incredibly important,” Mr Lowe said.
“To get the benefits of open data we need a very strong electronic digital identity system.”
Australians have nearly halved the number of times they go to ATMs, falling on average from 40 times a year to about 25 since the turn of the decade, according to data compiled by the Australian Bureau of Statistics and the RBA.
Meanwhile, over the past 18 years, the number of electronic transactions per person has increased from about 100 a year to nearly 500.
Mr Lowe said it was not yet appropriate to remove physical cash from the system and simply rely on electronic bank notes.
But he said Australia had reached a point where electronic transactions were ubiquitous and the safety and affordability of such transactions needed to be addressed.
“This shift (towards a near-cashless system) is a positive development that should promote our collective welfare,” he said.
“People need to have confidence that the electronic payment system will be operating when they want to make their payments and that it will deliver the payment services that they need.”
Mr Lowe said the RBA met with the Australian Payments Council earlier in the year and emphasised the need for institutions to compromise on their particular model in the national interest. Mr Lowe said growth in e-commerce activity had provided new opportunities for would-be fraudsters to strike.
Card-not-present fraud rose by 15 per cent in 2017 and now represents 87 per cent of total scheme card fraud losses, while industry has had successes in addressing card-present fraud with the introduction of chip technology and the switch to PINs.
“If fraud in the system keeps rising, then people won’t want to use electronic payment methods, they’ll think they may as well use cash instead,” Mr Lowe told the summit.