This morning, I listened to a speech by the Reserve Bank of Australia Governor, Glenn Stevens, addressing the Australian banking and payment industry establishment at the 23rd board meeting of the Australian Payments Clearing Association in Sydney.
Mr Stevens clearly urged the banks to stay on course and to deliver their investment commitments into the so called New Payment Platform (NPP), an RBA mandate to introduce real-time retail payments every day by the end of 2016.
In prior days, there had been speculation in the media that some banks had failed to sign off the NPP project by last Friday’s deadline. Mr Stevens alluded to prior failings of the industry to deliver on promises. He called “the record in Australia in instances where innovation requires cooperation between established players … mixed. We are all aware of important cases where things have run into the sand.”
The RBA’s memory of the MAMBO disaster must still be fresh. After years of effort, the major retail banks abandoned the committed $500 million real-time payments project. MAMBO stood for “Me and my bank online”. If the banks were not to deliver this time, “the Reserve Bank would be duty bound to consider a regulatory approach.”
Mr Stevens described the NPP as a piece of national infrastructure. While he recognised the banks’ legitimate pursuit of shareholder interests, he singled this project out as serving public interest. He urged the banks not to block new players and innovation and to take account of the interests of players who had not yet emerged.
For Tyro, this is very encouraging, because it seems as if this time the major banks are not going to get away with their innovation and competition stifling arrangements.
- We were very concerned to learn that when the banks determined the membership of the NPP, it did not even occur to them to reach out to Tyro, a new entrant banking institution. No they excluded us, limiting membership to banks (full ADIs not SCCIs).
- We were equally disturbed when we learned that the new rules for NPP commit the banks to settle among themselves in real-time, but left open the possibility for them to delay the availability of funds for the user. Tyro and Tyro customers are thus at the mercy of the competitors.
Glenn Stevens said that the Reserve Bank “is also aware that there could be a temptation along the way to seek to constrain the system, so as to conform to existing boundaries and business models. This is where the broader governance arrangements now in place need to take into account the interests of users and the need for the system to be open to competition, not just the interests of the existing players.”
“We – the industry and the Reserve Bank itself – are building a piece of national infrastructure.”
For Tyro this would be a dream come true. Finally, open access and a level playing field that allows Tyro and hopefully many more Tyros, new entrants and innovators, to bring new banking and payments solutions to Australia’s businesses and consumers.