The Future of Account-to-Account Payments in Australia
Recent discussions concerning the future of account-to-account (A2A) payments in Australia have sought to explore the potential for transitioning away from the Bulk Electronic Clearing System (BECS) by 2030. However, this topic has been notably absent from the latest ‘Findings Report’, a document released by the Australian Payments Network and Australian Payments Plus.
Defending BECS
The report, which delves into the efficacy of current payment systems, places a significant emphasis on the merits of BECS. BECS, a system long-established within the Australian financial infrastructure, has been lauded by stakeholders for its cost-effectiveness, efficiency, and minimal infrastructure requirements. These attributes are particularly respected by smaller financial institutions, government agencies, and large corporations.
The majority of stakeholders expressed concern about the comparative costs of potential replacements, including the New Payments Platform (NPP) and PayTo, even though there was recognition that costs could decrease with increased volumes and shared infrastructure. These concerns were most pronounced among users of large credit files.
Cost Concerns for Emerging Platforms
High settlement costs, a lack of transparency in transactional pricing for end-users, and compliance costs were all cited as potential barriers to migration from BECS to newer systems. The price disparity between BECS and NPP, especially for high-volume payments such as payroll and superannuation, was also raised.
Reliability of BECS
Turning to the topic of reliability, the report highlights the stability, predictability, and well-understood contingency processes of BECS. Over the decades, BECS has served as a reliable backbone for domestic A2A payments and is often used as a fallback during other system outages. Its multiple daily settlement cycles and consistent performance are seen as significant strengths, especially for bulk payments.
On the other hand, the NPP, with its 24/7 availability, enhanced data, and real-time settlement capabilities, is increasingly becoming the norm for retail customers. This system is also seen as beneficial for corporate priority or government emergency payments.
Concerns About the NPP
However, some stakeholders expressed concerns about the reliability and resilience of the NPP, particularly in the context of a possible future decommissioning of BECS. The lack of a proven contingency model for real-time payments was a recurring theme, with stakeholders emphasizing the risks of relying on a single platform.
Several stakeholders also noted that discretionary delays by some banks on first-time payments, often due to internal risk policies, can undermine confidence in instant payments. As the Australian financial sector looks towards the future, these concerns will need to be addressed to ensure a smooth transition and maintain the trust of stakeholders.
For more detailed insights, refer to the original article here.
