Australian banks’ reluctance to cooperate had bad results

[img_assist|nid=9882|title=|desc=|link=none|align=left|width=100|height=64] The Reserve Bank of Australia in the BankTech conference in Sydney expressed its discontent with the work of the nation's four largest commercial banks pointing out to their shirking on investments in payment systems technology which lead to a lack of innovation and neglect of systems like EFTPOS. This result in a situation where Australia is lagging behind other countries after the nation initially led the world in the 1980s with the EFTPOS network.

Michelle Bullock, RBA head of payments policy noted that banks prefer to focus on marketing cards rather than on investing in networks that could generate benefits to the consumer. Changing a common card to a platinum one as well as adding photo are not those innovations needed. Bullock emphasized the necessity of cooperation rather than competition between banks.

Chris Hamilton, CEO of the Australian Payments Clearing Association (APCA) pointed to chip and pin credit cards as another example where greater cooperation is required. He noted that a chip on a card is just a fashion statement until there is a terminal that can read that chip.

Reluctance to cooperate on the part of major national banks makes Australian consumers to do with payment choices dominated by PayPal, credit card schemes Visa and MasterCard, and a neglected EFTPOS network. High implementation of the payment networks offered by Visa and MasterCard was explained by the banks as customers’ choice. Commonwealth Bank's general manager of credit card and retail banking services, Stephen Karpin pointed that it has more functionality than EFTPOS.

Amanda Ralph, the National Australia Bank's senior manager of product innovation blamed Australia's scale for miserable state of innovation in payment systems.

Yet RBA has no intentions to regulate investments in payment networks while ACPA's Hamilton pointed out that a previous inquiry had recommended the RBA use standards to facilitate greater cooperation between competitors.