Innovation and the
Payments System
Dr Brad Pragnell
Head of Industry Policy, APCA
Payment Trends in Australia
Non-cash payments per capita
Source: RBA
Australia’s ranking in adopting electronic and
card-based payments
Source: McKinsey Global Payments Map
Innovation in Payments
• Australia has historically been a world
leader with EFTPOS, BPAY, significant
adoption of internet banking
• RBA currently undertaking a Strategic
Review of Payments Innovation –
consultation paper mid 2011 and
recommendations end of 2011
Issues confronting industry
• Network industries have particular issues
• Often a need for industry coordination –
for instance on standards to promote
interoperability and security
• If innovation is about “meeting unmet
consumer needs”, how do we foster
innovation in this environment?
What can policymakers do?
• Innovation is about providing a balance between
capacity and incentive
• Avoid “picking winners” and recognise that
innovation will come from the marketplace
• Provide the platform that promotes innovation
» Stable regulatory framework
» Provision of key infrastructure components (for instance
the RBA provides final settlement)
» Support for industry governance frameworks that
offer open and universal platforms to promote competition
Innovation and the
Payments System
Dr Brad Pragnell
Head of Industry Policy, APCA