RBA shelves payments system review amid behavioural shift
(26 March 2020 – Australia) The number of active credit cards have fallen by almost one million in Australia year-on-year according to the Reserve Bank of Australia (RBA) data. Despite a recent sharp bump in contactless payments popularity and renewed focus on ‘cashless’ payments as a result of coronavirus induced physical money pathogen concerns, credit card use continues to be replaced by debit or other payment methods.
Research conducted by P2P lender SocietyOne found that seven out of ten consumers with personal debt use at least one credit card (71 percent). Despite the growing range of payment methods becoming available to consumers, as monitored closely by East & Partners Merchant Payments program, they generally utilise the same underlying technology at this early stage of wide scale payment innovation and integration. Payment preferences vary significantly for online payments however, with a growing propensity for PayPal or buy-now-pay-later (BNPL) alternatives such as Zip Co or AfterPay.
Payments infrastructure must keep up with leaps in consumer payments behaviour, evidenced by the ongoing success of the New Payments Platform (NPP). However the RBA has notably halted its large scale payments systems review, conceding banks, regulators payments schemes and the broader digital payments ecosystem would struggle to absorb the far reaching regulatory overhaul. The RBA confirmed to stakeholders the highly anticipated review was delayed as a direct result of the coronavirus pandemic health crisis, the latest regulator to announce a reform and penalties holiday in specific areas. Surcharging, interchange fees and absorbing the cost of acceptance will also likely come back into focus following the worst of the pandemic as business owners cast their minds to adjusting margins.
“Consumers can expect more personalised and relevant benefits from their credit card provider in the future. Rapid advances in payment technology and more sophisticated data use have put the cardholder in the driver’s seat” stated American Express Vice President, Consumer Cards, Austin Huntsdale.
“You hear a lot about people paying with their phone, but it’s actually tied to your credit or debit card. Payment services need to provide more holistic services, not just the payment” said Emerging Payments Association Director General, Camilla Bullock.