CEO’s Corner

AusPayNet Summit 2022: Paving the Way

Next month, our members, stakeholders and staff will come together at our annual Summit. This will be the first time we’ve been able to do so physically since 2019 and that in and of itself is exciting. Our pre-Summit survey told us that members and stakeholders really value the opportunity to meet with each other face-to-face, so our agenda allows plenty of time for such networking.

However, the Summit – themed ‘Paving the Way’ – will deliver much more than that. The day will be emceed by award-winning journalist and presenter, Helen Dalley. The Governor of the Reserve Bank of Australia (RBA), Philip Lowe, will give his annual payments address, which will no doubt, as always, provide fascinating insights on the state and future of Australian payments.

The future of payments is also the topic of one of our panels, made up of representatives across our diverse member base. Another panel will focus on how Australian payments can prepare to be post-quantum cryptography (PQC) ready, which will be important from a data security perspective. This panel includes experts from Amazon, PCI and Thales.

A third panel will focus on the need to make Australia a hard target for scams. That panel will be led by Lynda McMillan, the Chair of AusPayNet’s Economic Crime Forum (ECF). Appropriately – given the ECF’s role in bringing banks and law enforcement together – it will involve banks and the AFP, as well as other players in the scams lifecycle, represented by Communications Alliance, and the ACCC.

Our “Big Debate” returns this year and asks the question: “Is Australia Ready for Digital Currency Payments?” The debate will be moderated by Ellis Connolly, Head of Payments Policy at the RBA, and, among other topics, will cover the role of central bank digital currency (CBDC), building on our recent workshop looking at CBDC use cases, which was attended by over 200 member representatives.

We will also have a series of three rapid-fire talks of 20 minutes each, focusing on:

• payments modernisation (cheques, BECS, ISO 20022 and COIN)
• unlocking the benefits of ISO 20022
• reforming Australia's regulatory architecture for payments.

The last of these will be presented by Nghi Luu, Assistant Secretary, Financial System Division, The Treasury.

Talking of The Treasury, I am also really looking forward to interviewing Australia’s Assistant Treasurer and Minister for Financial Services, The Hon Stephen Jones MP. The Minister and I will discuss the role of government in payments, and we will have a lot of ground to cover. Given the Minister’s recent announcement of the formation of the National Anti-Scams Centre, we will talk about how the Centre will help prevent scams by stopping them at source, and how it will also place responsibility on all players in the scams lifecycle by introducing new industry codes on telcos, finance and social media platforms.

We will also touch on the Consumer Data Right and its priorities moving forward, including payment initiation. Linked to both scams and consumer data, we will discuss cyber-attacks; this has particular focus post-Optus and Medibank, and the Government’s announcement of its objective to ensure Australia becomes the least favoured nation for international data hacks and threats.

Finally, we will also talk about the (Farrell) Review of the Australian Payments System; the Government’s Strategic Plan for Australian payments; and the Government’s position as a large user of the payment ecosystem and how that might change, in its use of legacy payments systems, such as cheques and BECS, and of more modern payment systems, such as the NPP and digital wallets.

All in all, the AusPayNet Summit has a fascinating agenda and affords a great opportunity to get together to look back on our last 30 years and pave the way forward to 2023 and beyond. I look forward to seeing you there.

Final tickets to the Summit can be purchased on our website for a limited time only.

Board changes

AusPayNet recently reappointed Jennifer Clark as an independent director for a further two-year term, ending 31 December 2025. Ms Clark was originally appointed in June 2014, and we look forward to her ongoing contribution as an AusPayNet director.

We would also like to recognise Olivia McArdle and Mark Tibbles, who concluded their terms as directors in October. Ms McArdle was appointed in November 2017, and Mr Tibbles in April 2019. We thank them both for their contributions to AusPayNet’s Board and to the committees on which they served.

Economic Crime Forum (ECF)

On 14 November, the ECF met in Melbourne. It was a timely meeting, given recent cyber breaches and government announcements regarding scam mitigation strategies, which included the formation of a National Anti-Scams Centre.

The ECF will work with the ACCC to ensure its function and initiatives contribute to the future National Anti-Scams Centre. This includes the ECF’s synergies with national law enforcement committees, such as the serious financial crime task force (Operation Themis) and the cyber taskforce (Operation Helios).

To ensure representation of key government organisations, the Australian Communications and Media Authority, the ACCC and Treasury have been invited to participate in the ECF.

At the meeting, several topics received significant focus, including how industry could assist law enforcement in evolving their skillsets and response strategies to address emerging cyber threats. Attendees also discussed how to render stolen identification credentials useless to criminals and how government could support private industry in strengthening digital identification with biometrics. Further topics included identifying opportunities for targeting and disrupting remote access scam networks operating offshore, and how financial institutions and law enforcement can work together more efficiently and effectively in criminal investigations.

AusPayNet has received positive feedback from members, government agencies, law enforcement and other stakeholders that the ECF is fulfilling a key gap within the ecosystem, in terms of private and public partnerships, developing and sharing risk mitigation strategies, and coordinating tactical strategies in partnership with law enforcement.

Learn more about the ECF here.

ISO 20022 migration

AusPayNet continues to lead the High Value Clearing System (HVCS) migration to ISO 20022. The industry test phase was completed as planned, and all participants were certified ready to go live.

However, following the decision by the European Central Bank (ECB) to delay the live date for TARGET2 from November 2022 to March 2023, SWIFT reviewed its timing for the go-live for cross border ISO 20022 and decided that it would also move to March 2023 to align with TARGET2.

Having explored our options to proceed with the HVCS migration this month, we made the unavoidable decision to also postpone our go-live date to March.

Keep a look out for the next Migration Monitor, to be published in December, for more details of our revised plans.

We would like to acknowledge the efforts and success of participants and the AusPayNet Program on being ready for November, notwithstanding the unavoidable delay.

Cross-Border Payments Round-Up

AusPayNet’s Cross-Border Payments Round-Up is a biannual newsletter that provides updates on Australia’s progress in implementing the G20-agreed Financial Stability Board (FSB) Roadmap for Enhancing Cross-Border Payments.

Our second issue, published in October, highlights the progress the FSB and its partners have made in pursuing improvements for cross-border payments. The issue also focuses on FSB roadmap progress and the G20 Leaders’ Summit.

You can read the second issue on AusPayNet’s website.

Regulatory round-up

Review of Banknote Distribution Arrangements

In August 2022, the RBA published the conclusions of its Review of Banknote Distribution Arrangements. An industry forum will be established to enable dissemination of information concerning the translation of current contractual arrangements for banknote distribution with the four major commercial banks into a publicly available, standard set of terms and conditions for system participants (both current and prospective) to access wholesale banknotes. The forum will be chaired by the RBA and facilitated by AusPayNet.

The decision to establish this forum aligns with AusPayNet’s suggestion in our submission that a dedicated forum for the wider cash ecosystem would create an opportunity to consider change in the Australian cash system. Through this forum, AusPayNet looks forward to assisting the RBA in achieving its goal of ensuring an effective, efficient, sustainable, and resilient cash system.

Statutory Review of the Consumer Data Right (CDR)

In September, the Treasury released the independent Statutory Review of the Consumer Data Right (CDR) report. The report acknowledged that CDR can capitalise on concurrent work being undertaken within the payments industry, in order to minimise potential friction points and reduce regulatory compliance for participants, with a view to delivering more streamlined consumer experiences. The report broadly supports AusPayNet’s suggestion for changes in relevant rules to harmonise the CDR consent flow and PayTo consent flow to benefit consumers, once the primary legislation has been amended to enable action initiation.

October 2022 Australian Federal Budget and the Digital Platform Services Inquiry

AusPayNet made multiple submissions to regulators on the issue of scams, encouraging an approach based on prevention and cross-sectorial collaboration. We are pleased that in its 2022-23 Budget, the new Australian Government has committed $12.6M to setting up the National Anti-Scams Centre, assisting with identity recovery, and raising end-user awareness.

In November, the ACCC released the fifth interim report for the Digital Platform Services Inquiry. The report noted the important role of digital platforms, offering valuable services to consumers and businesses, and recommended several targeted measures to protect users of these platforms against scams. These include a notice-and-action mechanism, verification of advertisers of financial services and products, and public reporting on mitigation efforts.

AusPayNet will continue working with regulators and other sectors to combat scams.

Updated ePayments Code Review

ASIC has released the updated ePayments Code, enforceable from 2 June 2023.

To ensure AusPayNet’s rules and policies align with the updated code, we have established an Updated ePayments Code Review Working Group (UECRWG) to review and recommend changes to the BECS Procedures and Guidelines for Mistaken Payments. We are also establishing a working group under the Issuers and Acquirers Forum to review and recommend changes to the IAC Code Set.

The working groups seek to finalise recommendations in Q1 2023.

Stakeholder engagement update

Having a say in the Central Bank Digital Currency (CBDC) conversation

In October, AusPayNet hosted a member session on CBDCs to support the RBA’s partnership with the Digital Finance Currency Research Centre (DFCRC). Together, the RBA and DFCRC recently released a whitepaper encouraging submissions from industry on potential use cases for CBDCs, and successful submissions could potentially form a pilot. The deadline for submissions is 31 March 2023.

More than 200 member representatives joined AusPayNet’s virtual roundtable, and since that session, we have been working with interested members to assess their ideas and provide guidance prior to their making submissions to the RBA.

Stakeholder Advisory Council

In November, our Stakeholder Advisory Council met for the final time this year. We welcomed a new stakeholder, Digital Industry Group Inc. (DIGI), and sought Council feedback on our role in transformation (cheques and BECS), CNP fraud mitigation, and our journey to becoming an Authorised Standard-Setting Body.

The Council remains an important part of AusPayNet’s governance structure, and we look forward to continuing to work with stakeholders in the New Year. Before then, we will be seeking their feedback on how we can further improve our stakeholder engagement activities in 2023.

New members

During the last quarter, AusPayNet was pleased to welcome the following new Payment Service Provider (PSP) members:

• Episode Six Inc (effective 26 Sept 2022)
• Monoova Payments Pty Ltd (effective 11 Oct 2022)

For more information on AusPayNet membership, please visit the membership page on AusPayNet’s website.