We have searched around the globe to find you all the latest news on payments.

What the banks have been up to:

Australia could have three new banks in operation by Christmas, with the Australian Prudential Regulation Authority (APRA) poised to hand out unrestricted full banking licences. The banks, Volt Bank, 86400 and Judo Capital, are startups that are less than 12 months old. New Prime Minister Scott Morrison wanted more pressure on the existing banks to deliver better customer service when he was Treasurer, with these licences set to deliver exactly that kind of pressure.

Pressure is being mounted for the royal commission into the banking sector to be extended. Queensland cross-bencher, Senator Fraser Anning, moved a motion for the investigation to broaden its investigation to include the insolvency sector's treatment of farmers. All five North Queensland politicians who appeared on ABC's Q&A program on August 27, Bob Katter, Labor's Cathy O'Toole, One Nation leader Pauline Hanson, LNP backbencher George Christensen and Queensland Greens Senator Larissa Waters, backed the extension.

The Australian Greens have called for the big banks Westpac, ANZ, NAB and the Commonwealth Bank to be broken up with each to perform just one of its four key functions. The call is the Greens plan to increase competition. The Greens Treasury spokesman, Peter Whish-Wilson, said the policy would ensure the banks "are no longer too big to regulate".

Commonwealth Bank customers were subject to a major outage in August that saw some cards and transfers not being accepted by business. The five-hour outage also meant many customers had difficulty logging into their online banking services.

Distributed ledger technology:

Australian fintech, SendGold, has established a peer-to-peer payment platform based on gold. The platform allows users to save, invest, gift and pay using actual gold, SendGold has already attracted $2.3 million in investment and is hoping to raise another $2 million through crowdfunding. Customers become the outright owners of 99.95% pure physical gold bullion, stored in Australian vaults.

The Queensland Government has issued a grant to a blockchain-based tourism start-up as part of over $8.3 million of innovation funding. The TravelbyBit digital currency payments platform is designed for the travel and tourism industry, one of the key economic planks of Queensland. It plans to boost tourism numbers to Central Queensland through selling travel offers with cryptocurrencies.

Former Australian Test cricket captain Michael Clarke has been criticised for endorsing an Australian crypto start-up without any knowledge on what they actually do. Clarke endorsed Brisbane-based crypto trading exchange Global Tech's ICO, which included the statement: "I can't wait to learn more about blockchain technologies". He fielded plenty of flak on social media, with some suggesting he was throwing away his reputation.

RBA

The RBA has slammed institutions that are slowing down the New Payments Platform's (NPP) performance at a parliamentary committee in August. RBA Assistant Governor, Financial System, Michele Bullock, said there were institutions holding the NPP back because they weren't prepared for its launch earlier this year.
"They had many, many years to get on top of this and so to discover, as we were going live, that they weren't ready, was a bit disappointing really," Bullock told the committee.

The RBA has entered the digital identity debate which could result in consumers becoming part of a payments-related digital identity build. The Federal Government's Department of Human Services and the Digital Transformation Agency have been trying to establish a build for three years, but the involvement of the RBA and the credibility it offers could fast-track that becoming a reality. RBA Assistant Governor, Business Services Lindsay Boulton said he wanted to see a unified front in creating the build.
"Whatever form it finally takes, it is important that the work to develop the framework is coordinated," Boulton said.

Over 7 percent of the Australian population has signed up for a PayID, the RBA has reported. The PayID, required to use the NPP, has been adopted by 1.8 million Australians or 7.2 per cent of the population. While this figure is positive, it is below the early industry expectations RBA governor Philip Lowe said.
"This partly reflects the fact that a number of the major banks have been slow to make the new system available to their customers. They are now making it available, so we expect take-up to increase," he said.

Mobile commerce:

Mobile commerce is extending to the family car, with connected vehicles now allowing consumers to purchase food, fuel and promotional offers from their dashboard while on the move. Connected cars are expected to make up 76 per cent of new cars by 2024. At present, these connected cars can link up to fuel stations and streaming services, but major players like Starbucks are now researching these connected cars and how they can market their products to people on their daily commute.

Australian business-only bank Tyro has signed a major deal with major Chinese app Alipay to become the first and only bank in Australia to provide all-in-one EFTPOS solutions. The Alipay integration will make it easier for Australian merchants to sell into the Chinese market through the hugely popular app. It will also assist in attracting more Chinese tourists to Australia, with easier payment options for them to book trips.

Fraud is keeping pace with the rapid growth of mobile commerce. LexisNexis figures show that fraud cut claimed 0.5 percent of online retailers’ total revenue in 2013, which has risen to 1.8 per cent in 2018. The cost of dealing with fraud has also risen, from $2.25 for each dollar of fraud in 2015 to almost $3 in 2018. These costs are highest when the company is selling digital goods, the research has shown.

Other electronic commerce:

Australian 'buy now, pay later' platform, Afterpay, has had a successful launch in the United States and is now targeting the UK. CEO Nick Molnar said these launches pointed to a "retail-led global expansion opportunity" for Afterpay, which has seen sales quadruple over 2017-18 to $2.18 billion.

Australia Post has boosted its profit margin by 41 per cent to $134 billion by transforming its business model to accommodate ecommerce. After becoming primarily focused on parcel delivery, the Australian mail company announced the rise in profits on the 2017 financial year. Parcel revenue was $3.5 billion and volumes rose 11 per cent.

Amazon's introduction to Australia has been slow, but that is set to ignite with the company's second fulfilment centre to open in the south-western Sydney suburb of Moorebank. It will operate as both a product shipping and storage hub for Australia's East Coast. This hub is the size of six football fields and is set to expediate deliveries on the east coast dramatically.

"This is an exciting milestone for Amazon in Australia. The Sydney facility in Moorebank will help Amazon ensure that customers enjoy fast and reliable delivery across more areas of the country," Amazon's Director of Operations Robert Bruce said.

Other items of interest

Confidence in the Australian fintech landscape has brought Billion-dollar British fintech firm Ebury to Sydney. The company was founded in 2009 and assists small businesses in managing transactions internally by offering tailored financing solutions, something usually only offered by major corporations or banks. Co-founder Juan Lobato said establishing their business in Australia positioned Ebury well to continue its path towards becoming global.

"We are excited about the opportunity in Australia, and see it is a gateway country for the Asia Pacific and a key market in our ongoing global growth strategy," he said.
This article represents the views and opinions of the author and do not necessarily reflect the opinions of BPAY.
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