The Payments System Board convened to address several significant issues, focusing on operational incidents and future developments in Australia's payments infrastructure.
A primary topic was the CHESS batch failure incident that occurred on December 20, 2024. The Board identified this disruption in cash equities clearing and settlement as a major operational concern. Given previous warnings from the Reserve Bank of Australia (RBA) about ASX's aging assets like CHESS, the incident was deemed disappointing. The Board resolved to implement regulatory measures to ensure ASX prioritizes addressing these risks. Details of the RBA's response will be published by March's end.
Another key discussion point was the transition away from the Bulk Electronic Clearing System (BECS), which is slated for decommissioning by 2030. BECS currently facilitates essential account-to-account payments across Australia. The Board endorsed recommendations aimed at mitigating risks associated with this transition, emphasizing collaboration with the government and RBA to define strategic objectives for future payment systems. A report detailing these findings will be released later in March, with an industry progress update expected next year.
End-user costs for account-to-account payments were also examined, highlighting potential challenges if users migrate from BECS. Members agreed on the need for greater pricing transparency from service providers and supported establishing a robust pricing data collection by the RBA for future policy considerations.
The review of retail payments regulation was another agenda item, where arguments regarding merchant card payment costs and surcharging were evaluated based on stakeholder feedback. The Board is exploring options to enhance safety, competition, and efficiency within the payments system and plans to release a consultation paper outlining preferred policy options by mid-2025.
Lastly, international and domestic efforts concerning central bank digital currencies (CBDCs) were discussed. Domestically, Project Acacia is underway to explore how wholesale digital money innovations could aid tokenized asset settlement. An Industry Advisory Group has been formed to support this initiative. Additionally, focus groups are planned for later this year to assess unmet payment needs potentially addressed by a retail CBDC in Australia.