tl;dr
RBA Governor Michele Bullock outlines critical steps to modernize Australia's payment infrastructure, focusing on upgrading outdated systems, enhancing cross-border transactions, combating fraud, and ensuring cash accessibility amid digital shifts.
**RBA Governor Michele Bullock Outlines Four Key Areas for Modernizing Australia’s Payment System**
In a speech delivered on October 24, Reserve Bank of Australia (RBA) Governor Michele Bullock emphasized the urgent need for collaboration among policymakers, the government, and industry to modernize Australia’s payment system. While the address did not focus on monetary policy or economic conditions, it underscored the importance of balancing innovation with resilience, ensuring security, and addressing the evolving needs of users.
**Modernizing the Payment Infrastructure**
Bullock highlighted the RBA’s priority to upgrade Australia’s account-to-account payment infrastructure, starting with the Bulk Electronic Clearing System (BECS). As an aging network used for payroll and welfare transfers, BECS lacks modern features such as real-time processing and detailed payment data—capabilities already offered by the New Payments Platform (NPP). Analysts acknowledge BECS’s reliability and affordability but stress the need for modernization.
A roundtable involving the RBA, Treasury, and industry groups has initiated plans to replace BECS, aiming to finalize the strategy by year-end and implement it by mid-2026. Bullock noted the challenge of balancing costs, reliability, and user needs, acknowledging that interests among stakeholders may not always align.
**Cross-Border Payments and Fraud Prevention**
The second focus area is improving cross-border payments. The RBA plans to collaborate with industry leaders to enhance data infrastructure, making international transfers faster, cheaper, and more transparent.
Bullock also stressed the importance of combating fraud and scams, which continue to evolve with criminal tactics. She called for ongoing innovation to stay ahead of threats, including preparing for quantum computing risks by upgrading card systems to use the Advanced Encryption Standard (AES).
**Operational Resilience and Cash Distribution**
The third priority is strengthening operational resilience, ensuring the payment network remains secure and reliable amid aging systems and growing complexity. Bullock emphasized the need for robust frameworks to prevent outages and adapt to emerging technologies like central bank digital currencies (CBDCs).
Despite the rise of digital payments, the RBA remains committed to maintaining cash availability. Bullock noted that declining cash usage has strained distribution networks, prompting discussions on new rules to ensure access. Collaborative efforts with banks and industry stakeholders aim to create a more efficient, sustainable cash system.
**Economic Outlook and Regulatory Shifts**
RBA Assistant Governor Christopher Kent added that easing financial regulations may support economic stability, with narrower loan spreads and increased mortgage repayments signaling improving conditions. These developments could help maintain full employment and guide inflation toward target levels.
**Conclusion**
Bullock’s vision for Australia’s payment system underscores a dual commitment to innovation and security. By addressing outdated infrastructure, enhancing cross-border capabilities, combating fraud, and preserving cash access, the RBA aims to build a resilient, future-ready financial ecosystem. As the nation navigates technological advancements, collaboration across sectors will be critical to achieving these goals.