We know that technology and globalisation will sooner or later change banking as we know it. It is not so much about picking winners. It is about creating an environment where the best ideas win. God forbid, they could be Australian. New Australian players could emerge on the global stage.

This requires new thinking. Change.

Tyro did the unthinkable, a start-up competing successfully against the major banks in a core banking process.

Tyro did again the unthinkable, launching the first Australian Fintech Hub to encourage and enable an entire ecosystem to compete against the major banks.

So the unthinkable is possible. Less unthinkable, rather urgent is for the RBA to take decisive action on two issues.

Get rid of interchange fees. That would eliminate millions of dollars that poor Australian pay to fund rewards of wealthy Australians and small merchants pay to fund the discounts given to the big retailers. The vexing surcharging issues would disappear, since it is essentially just the reversal of high interchange fee. An obstacle to innovation would disappear and Australia would be catapulted into the cashless society of the future.

Force access for innovators and new entrants to the core banking system. The much heralded New Payments Platform (NPP) restricts membership to general banks, except for PayPal and companies servicing general banks. That locks out competition. The NPP rules restrict the obligation – mandated by the RBA – to settle real or near-real-time to between banks and does not extend the obligations to make funds available to merchants and consumers, where it matters. That stifles competition. A challenger such as Tyro would depend on its major competitors – the dominant banks – in terms of access, service level and fees (overlay services).

I am convinced that, if Australia was to catch up in the global race for the payment systems of the future, it requires an “Engaged Regulator” who makes those types of decisions.