CEO’s corner

What to expect in 2025

2025 is an election year, with the election needing to be held on or before 17 May 2025. This may have an impact on the progress of payments-related legislation, such as the implementation of the Scams Prevention Framework (which passed the Senate on 12 February 2025 and the House of Representatives the following day), the changes to the Payment Systems (Regulation) Act (PSRA), and the Exposure Draft for the first tranche of payments licensing legislation. It may also impact the timing of the next iteration of the Strategic Plan for Payments.

Outside of the policy domain, and as part of our strategic role in ensuring the effective modernisation and rationalisation of Australia’s payment systems, AusPayNet is leading the coordination of industry transformation programs on cheques, BECS and AES, subject to regulatory approvals. 
 

Cheques

In June 2023, the Australian Government released its Strategic Plan for Australia's Payments System, which outlined the key priorities and supporting initiatives for Australia’s payments system. One of the key priorities was modernising payments infrastructure, including by phasing out cheques.  

In November 2024, following a consultation process, the Government released its Cheques Transition Plan, which outlined next steps to ensure that the transition away from cheques is smooth and Australians who use cheques are well supported through the transition.

The Transition Plan is to be delivered in two phases:

• By 30 June 2028, cease issuance of cheques
• On 30 September 2029, cease acceptance of cheques, and close the cheques system.

In the Cheques Transition Plan, the Government noted AusPayNet’s leadership of an industry program of work to coordinate the transition away from cheques, subject to seeking and receiving ACCC authorisation to enable collaboration among industry participants and other key stakeholders on the coordination program.

AusPayNet’s program of work to coordinate the transition will include workstreams on overall migration management, migration of use cases, and clear and consistent industry communications. 

On 18 December 2024, AusPayNet was granted interim authorisation by the ACCC on the Cheques Transition Program. Final Determination by the ACCC is expected in April 2025. If granted, it would enable collaboration among industry participants and other key stakeholders on the coordination program. 

The Interim Authorisation enables AusPayNet to start the preparatory work needed for a coordinated wind-down of the cheques system. AusPayNet has accordingly established a program of work to achieve this outcome, and updates will be regularly provided to APCS Members and key stakeholders. 

For more information, you can access our Cheques Transition Program website page. 

BECS

Government’s Strategic Plan also expressed support for an industry-led transition away from the legacy BECS Framework, in favour of more modern account-to-account payments alternatives. 

In November 2023, after an extensive three-year consultation with the payments industry and key stakeholders, AusPayNet announced June 2030 as the conditional target end-date for the BECS Framework. The aim of the conditional target end-date was to enable greater focus on and acceleration of the transition to more modern alternatives that better meet the new and emerging needs of the end-users and the Australian payments ecosystem. 

The conditional target end-date is subject to the industry making progress in a number of areas, including but not limited to: 

• account reachability
• use case capabilities (particularly for bulk payments made by businesses and government)
• access to and resilience of modern alternatives
• cost of change and ongoing cost of modern alternatives
• an industry level scope, timeline and roadmap for the transition. 

As the custodians of the BECS Framework, AusPayNet is committed to ensuring the transition will be managed responsibly, with no disruption to the efficient and secure flow of essential payments. 

AusPayNet has established a program of work to achieve this outcome, with activities across three dimensions: collaborate with industry, coordinate the migration, and control the future of the framework. 

For more information, you can access our BECS Transition Program website page.

AES

Another priority in Government’s Strategic Plan is promoting a safe and resilient payments system that protects end-users and safeguards their ability to transact safely and securely. This includes ensuring the payments industry is well-placed to protect against cyber-attacks and requiring the industry to continually uplift system-wide security standards and practices, including encryption methods for card payments systems. The Plan called for the cards payment industry to begin migration to the Advanced Encryption Standard (AES) in 2025. 

This process requires the design, development, and delivery of an industry-wide program to migrate the Australian card payments system from Triple Data Encryption Standard (TDES) to AES cryptography standards. The scope of this program includes: 

• 55 issuers
• 25 acquirers
• domestic and international card schemes
• 970,000 payment terminals
• 25,200 ATMs.

Neither physical cards nor digital wallets are impacted directly by this change. 

AusPayNet is leading an industry-wide program to migrate the Australian card payments system to the AES. Australia is a leading jurisdiction in the global migration to the AES. The program is planned for completion in 2030/31, subject to any necessary regulatory approvals.

For more information, you can access our AES Migration Program website page.
 

Payments reforms

AusPayNet continues to engage with regulators and Government stakeholders on the broad range of regulatory reforms affecting the payments industry, including the following consultations.
 

RBA Review of Merchant Card Payment Costs and Surcharging

In November, AusPayNet responded to the Issues Paper for the RBA's Review of Merchant Card Payment Costs and Surcharging – the first phase of the RBA's planned review of retail payments regulation. 

AusPayNet welcomes the RBA's commitment to regularly reviewing its regulatory settings for the payments industry to ensure that they remain fit for purpose. We recognise that any regulatory changes arising from this Review are likely to have significant and varied implications across different groups within the payments ecosystem and its end-users. In this context, our submission focused on providing insights and considerations to inform the evaluation of potential regulatory responses from an industry-wide perspective. In particular, we highlighted:

• The value provided by the payments ecosystem for Australia’s economy and society, and the need for any regulatory decisions to be supported by comprehensive, quantitative research that considers the distribution of both costs and benefits across the ecosystem and end-users. 
   
• Member concerns about conducting a partial Review before the passage of broader reforms to the PSRA, and the importance of considering the payments ecosystem holistically, rather than making changes that would only apply to certain payments networks or participants in isolation and potentially create competitive distortions. 
   
• The importance of taking a broader view of efficiency that considers not just costs, but also quality, security, innovation, and the long-term sustainability of the payments ecosystem. 
   
• The risk that certain regulatory measures and increased regulatory complexity could undermine policy effectiveness through unintended behavioural responses.
   
• The value of maintaining flexibility in business and pricing models across the payments industry, to enable continued innovation and competition, and to better meet the needs of merchants. 
   
• The importance of improving end-user and other stakeholders’ understanding about how the payments system operates and the value it provides.

With careful consideration of these issues, we hope that the outcomes of this Review will help to further enhance - rather than inhibit - competition and efficiency in the payments ecosystem. AusPayNet looks forward to continuing its engagement with the RBA as it progresses this Review over the coming year, to ensure that the regulatory framework achieves its policy objectives while maintaining the payments system’s ability to support Australia's economic activity through secure, reliable and innovative payment services. 
 

Scams Prevention Framework 

In October, AusPayNet responded to Treasury’s consultation on the exposure draft legislation for establishing the Scams Prevention Framework (SPF). Our submission noted that while Members generally supported the policy intentions underlying the proposed legislative framework, there were considerable concerns that some elements of the draft legislation could have significant negative implications for competition, efficiency, innovation, and trust in the payments ecosystem. 

To enhance the effectiveness and minimise the potential unintended consequences of the SPF, the submission made several recommendations for refining the enabling legislation, including: 

• Limiting the scope of consumers that regulated entities are obliged to protect under the civil penalty provisions to a more practicable range. 
   
• Amending the liability regime to account for the distribution of responsibility across the scams lifecycle and limiting severe penalties to systemic breaches of the SPF sector codes. 
   
• Providing greater certainty to regulated entities about the scope of their obligations, including through the SPF sector codes and regulatory guidance, and ensuring that any safe harbour provisions are sufficiently broad to cover necessary conduct under the SPF. 
   
• Considering the impact of the SPF on non-bank payment service providers (PSPs). 

AusPayNet’s submission to the subsequent Senate Economics Legislation Committee inquiry into the provisions of the SPF Bill 2024 built on the feedback provided in response to Treasury’s consultation on the SPF exposure draft legislation, and the initial consultation on mandatory industry scam codes in January 2024. In particular, while we welcomed the adoption of several of our recommendations on the exposure draft legislation, we noted that many of our Members’ concerns — including those highlighted above — had not been sufficiently addressed in the current Bill. While recognising that further detail on some of the obligations under the SPF would be provided in the forthcoming SPF rules and sectoral codes, we asked the Committee to consider further refinements to the overarching legislation to enhance the effectiveness and minimise the potential unintended consequences of the Framework.  

The Committee released its inquiry report on 3 February, recommending that the Senate pass the Bill. The report included two recommendations from the Coalition of particular interest to the payments industry: that the Government provide a clear roadmap for the inclusion of other regulated sectors, including non-bank PSPs and digital assets businesses; and that, to do so, the Government urgently progress new licensing frameworks for those sectors. 

The Bill was subsequently passed by the House of Representatives on 6 February, and by the Senate on 13 February. We look forward to working with the Government and the relevant regulators on the designation of key sectors in the scams lifecycle, and the development of the SPF codes for those sectors over the coming year. 
 

Pre-Budget Consultation 

In January, AusPayNet made a submission to Treasury’s 2025-26 Pre-Budget consultation. Our submission highlighted that the Australian payments industry is making strong progress on delivering on the Government’s vision — as set out in the Strategic Plan for Australia's Payments System — of a “modern, world-class and efficient payments system that is safe, trusted and accessible, and enables greater competition, innovation and productivity across the economy”. We also welcomed the progress made by the Government over the past two years on several of the key initiatives it had committed to under the Strategic Plan. These included consulting on reforms to the PSRA, a new licensing framework for PSPs, the cross-industry SPF, and plans for winding down the cheques system.

Our submission emphasised that finalising these and other reforms under the Strategic Plan will be essential to realising the Government’s vision for the Australian payments system over the long term. This will require continued Government focus and adequate resourcing across the relevant regulators and Government agencies over the coming years. In particular, we encouraged the Government to ensure that sufficient funding in the 2025-26 Budget is allocated to: 

• Strengthening Australia's defences against economic crime, including through the implementation of the SPF and the ongoing work of the National Anti-Scam Centre.
   
• Implementing the payments licensing framework and ensuring that the relevant regulators have the resources to effectively carry out their roles under the new framework.
   
• Modernising Government payments systems and processes to support the industry's transformation initiatives, including the wind-down of the cheques system.  

Portability Standard

After working together with an industry group for over six months, AusPayNet released the draft Standard for Payment Service Provider Porting of Merchant Payment Related Data (Standard) in November 2024. This Standard aims to assist the industry in meeting the RBA’s tokenisation expectation on portability (4.ii and 4.iii), issued in May 2024. Wider consultation on the Standard and accompanying Guidelines occurred during December 2024 and January 2025, with approximately 100 stakeholder entities invited to provide feedback.

The findings from the consultation are currently being considered for the final draft of the Standard to be presented to the AusPayNet Board for their approval by Q2 2025.

AusPayNet is grateful for the strong contribution from and the collaboration of the payments ecosystem in the development of the Standard. The process to develop the Standard has yielded valuable insights and learnings, and demonstrated the value AusPayNet provides as a standards-setting body.

AusPayNet looks forward to future engagement with the industry on areas where greater standardisation can assist in achieving better outcomes for industry participants and users. 
 

Cross-border payments

The Financial Stability Board (FSB) continues work on its G20 Roadmap for Enhancing Cross-border Payments: Priorities for the next phase of work and Priority actions for achieving the G20 Targets.

The FSB has released its Work Programme for 2025, in which it notes that despite progress on Roadmap action items to date, significant effort is necessary to improve the user experience across all payments market segments.  

Accordingly, the FSB will reframe its strategy to focus on identifying and addressing challenges to implementation of the Roadmap actions and strengthening engagement with the private sector. It will do so in coordination with the Committee on Payments and Market Infrastructures (CPMI), other standards-setting bodies and international organisations.  

The FSB also notes that there has been no tangible progress in improving Legal Entity Identifier (LEI) adoption. 
 

Industry taskforces

CPMI’s public and private sector engagement continues through the Payments Interoperability and Extension (PIE) Taskforce. It recently posted a webinar on its key deliverables. The PIE Taskforce also issued an invitation to market stakeholders to join it, as part of a renewal of its membership base to further increase geographic representation and include a diversity of business models. 

With much of the policy development completed, the FSB’s focus has turned to implementation of the policy recommendations, as well as to addressing any other legal, regulatory and supervisory frictions that have been identified as significant impediments to achieving the goals of the G20 Roadmap. The FSB, too, has invited organisations that offer cross-border payment services and relevant industry associations to nominate senior representatives to serve on the FSB’s Taskforce on Legal, Regulatory, and Supervisory matters to deliver on these goals. 

The CPMI’s other area of focus is its cross-border data exchange and message standards work, which is being undertaken by the API Panel of Experts. A significant piece of its recent work was the October 2024 publication of its Report to the G20: Promoting the harmonisation of application programming interfaces to enhance cross-border payments: recommendations and toolkit.

The transfer of data across borders is essential to the functioning of the cross-border payments system. The FSB notes in its Final Report: Recommendations to Promote Alignment and Interoperability Across Data Frameworks Related to Cross-border Payments that greater alignment and interoperability of data frameworks would improve efficiency in transferring payments data across borders. This report outlines recommendations for promoting alignment and interoperability across data frameworks applicable to cross-border payments. 
 

ISO 20022

The Bank for International Settlements and CPMI have taken further steps to promote ISO 20022 harmonisation for enhanced cross-border payments. To support maintenance and encourage global adoption of the harmonised data requirements, the CPMI will establish a joint panel with members from the ISO 20022 global market practice groups. The CPMI also encourages industry to develop global ISO 20022 market practice guidelines for fast payments (also referred to as instant payments) based on the harmonised data requirements. Additionally, the CPMI will continue to engage with payment system operators and payment service providers to encourage them to implement the harmonised data requirements by end-2027. This will be supported by central banks and the PIE Taskforce.

ISO 20022 migration

Following the completion of the migration of AusPayNet’s 50 HVCS Participants to the use of ISO 20022, we published our final Migration Monitor newsletter in December. You can find the newsletter on our website. 
 

Device approval process

On 1 January, a revised version of AusPayNet’s device approval process came into effect. In our latest blog, we have provided important information about the revised process. 
 

Economic crime

Economic Crime Forum (ECF)

The next ECF will be held in Melbourne on 25 February, coinciding with national law enforcement meetings hosted by Victoria Police. In 2025, law enforcement is seeking to further collaborate with banks to identify and disrupt money laundering networks that enable financial crime. For every scam, criminals need to launder the proceeds. Making laundering more difficult increases the chance of repatriating funds to victims and/or stopping the proceeds of scams from leaving the regulated market.
 

Card-not-present (CNP) fraud

AusPayNet is working with industry on root cause analysis and potential solutions for mitigating overseas CNP fraud on Australian-issued cards. While overseas spend on Australian-issued cards accounts for only 3 per cent of overall card spend, it accounts for 51 per cent of all card fraud (the rise of scams compounds in Southeast Asia is a suspected contributing factor). For more information on CNP fraud, read our recently published FY24 card fraud snapshot blog. 

eConveyancing Payments Industry Code

AusPayNet continues to work with the Australian Registrars' National Electronic Conveyancing Council (ARNECC) to ensure a smooth and orderly establishment of the Code and effective adoption of the Code by both Electronic Lodgment Network Operators and financial institutions. With membership of the Code flagged as a new requirement in the latest draft of ARNECC’s Model Operating Requirements (MoRs), AusPayNet proposes to stand up the Code and welcome applications to membership in advance of these draft MoRs becoming effective. 
 

Stakeholder engagement

Our Stakeholder Advisory Council met in December 2024. At this meeting, we sought the Council’s feedback and perspectives on:

• Our payment policy priorities (the SPF and RBA Review)
• AusPayNet's plan to coordinate the wind-down of the cheques system  
• The transition from BECS
• The proposed cash acceptance mandate by Treasury
• Artificial intelligence in payments. 

We also thanked our Council Chair and AusPayNet Board member, Kate Mulligan, who has stepped down from the Board (and therefore as Chair of the Council). Kate has been instrumental in ensuring Council’s objective is met and that stakeholders' views have been heard and considered by our Board.

At our next Council meeting in February, we will welcome our new Chair, Cathie Armour, who is joining AusPayNet’s Board as an independent Director. 
 

AusPayNet events

AusPayNet Summit

Our annual Summit, held in December, was the most successful to date with a record 640 delegates in attendance. Planning for 2025 has commenced, and in the meantime, we invite you to relive Summit 2024 through our highlights video and photo gallery.
 

Brisbane event

Our first in-person Member event in Brisbane will be held at Suncorp offices next Tuesday, 25 February. We are expecting attendance from 50 Member representatives. The event program will feature two sessions: an update on the payments strategic plan and regulatory reforms, and a panel discussion on challenges and opportunities of the BECS Transition. The event will conclude with networking drinks. 
 

New members

AusPayNet is pleased to welcome:

• Bano Pty Ltd as a BECS Tier 2 Member (effective 25 November 2024)
• Next Payments Pty Ltd as an IAC Affiliate Member (effective 23 January 2025). 

For more information on AusPayNet membership, please visit our website.