Australia’s Payments System Set for Overhaul as Cheques Are Phased Out

Must Read

Australia’s payments processing ecosystem is set for a significant transformation as the country rolls out a new strategic plan to modernise the system and phase out cheques in favour of digital transactions. 

The plan, which focuses on trustworthiness, accessibility, innovation, and efficiency, outlines vital pillars to achieve these goals.

One of the significant changes included in the plan is the seven-year phase-out of cheques, which currently account for a mere 0.2% of non-cash payments and have become increasingly costly to maintain. This move reflects the declining use of cheques and the growing popularity of digital payment methods.

The COVID-19 pandemic has further accelerated the shift towards online shopping and digital payments. With more people relying on e-commerce and contactless transactions, the need for a modern and efficient payment processing ecosystem has become increasingly apparent.

To meet these demands, the transition will involve moving away from traditional batch-based payment clearing systems to the New Payments Platform (NPP), which offers near real-time settlement through services like PayID and Osko.

Industry experts, such as the director of strategy at Airwallex, emphasise the need for regulatory reforms that prioritise the interests of small and medium businesses and consumers in the payments sector. They argue that the current system is outdated, anti-competitive, and favours larger banks.

The Australian Banking Association (ABA) supports the reform, highlighting that the country’s payment system is overdue for an overhaul. They stress the importance of modernisation to keep pace with evolving consumer preferences and technological advancements.

The adoption of mobile payments is on the rise in Australia, with PayID registrations already reaching 15 million and mobile wallet usage experiencing significant growth. Cards now account for 75% of payments, and mobile wallet apps have seen a remarkable surge in recent years.

“New digital products are changing the way we make payments and the way businesses provide payment services,” Chalmers said.

“The Government is acting to ensure Australia’s payments system remains fit-for-purpose now and into the future.”

This transformation reflects Australians’ increasing reliance on cashless payment methods, driven by the convenience, speed, cost-effectiveness, and security they offer. As digital transactions become the norm, the new strategic plan aims to ensure that Australia’s payments system remains fit for purpose now and into the future.

- Advertisement -spot_img
Latest News
- Advertisement -spot_img

More Articles Like This

- Advertisement -spot_img