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AP+ is Australia’s chance to join Asia’s payments party

Australia is merging domestic payment systems into AP+ but its priorities are not yet known.



Australia has sat on the sidelines as Asian authorities increase collaboration and experimentation among their payment systems.

Singapore’s faster-payments scheme, PayNow, has bilateral ties with its equivalents in Thailand, India, and as of November, the Philippines.

Such cross-border pilots reflect a desire to link up what are now many real-time domestic payment systems, which is key to enabling the region take full advantage of trade and the growing importance of the internet economy.

Australia has so far been absent from such government-to-government experiments. A new merger of various domestic systems now gives the country a new opportunity to connect to Asian payments, but the agenda of the new entity, called Australian Payments Plus (AP+), has yet to be determined.

From three to one

The creation of AP+ was controversial. Merchants, including some of the country’s biggest retailers, were concerned that consolidation would mean less competition – and higher interchange fees (the transaction fees they pay to banks whenever a customer uses a debit or credit card).

However, in September, the Australian Competition and Consumer Commission approved the merger on the grounds that it would allow for greater efficiency and therefore reduce costs, end duplication, and position the country for more digital services.

AP+ was meant to go live by the end of this year but as it’s already December 21, early 2022 looks likely. The board has been working on setting governance and other standards for the combined entity, but its biggest task remains choosing a CEO.

Taking the reins

A leader could come from one of the three companies being consolidated: Eftpos, for debit and credit card purchases in stores; BPay, for paying bills; and the New Payments Platform (NPP), the faster-payments infrastructure mandated by the Reserve Bank of Australia.

Eftpos is the oldest of the bunch, founded in 1984, but it also operates the most fintechy piece of the puzzle: Beem It, a consumer peer-to-peer payments app built in 2018 by National Australia Bank, Commonwealth Bank and Westpac.

All three companies are owned by different combinations of banks as well as fintechs or retailers, but they are known for independent streaks and strong CEOs. (The head of BPay, John Banfield, recently removed himself from competition by taking a role at a research company.)

Alternatively, the board might choose an outsider who won’t be open to attacks of favoritism.

Building locally – thinking globally?

The AP+ board is chaired by Catherine Brenner, the former chair of AMP, who left that institution under a cloud in 2018. Is she looking for a visionary CEO who can take the lead in cross-border initiatives? Even if that is part of the CEO’s mandate, will they have the bandwidth to think about the international dimension?

“The conversation is about being the best domestic scheme, but how it connects with global payments is always the bolt-on we don’t think about,” said John Ryan, director general of Emerging Payments Association Asia, in Sydney. “Cross-border is too often an afterthought.”

Citing real-time bilateral payment projects involving the likes of Thailand, India and Singapore, Ryan said: “Australia is not integrated with Asia, so there’s a risk of missing out and not being part of bilateral relationships with our trading partners to move money.”

Banks supporting the merger do argue that a cleaner tech standard and coordinated strategy will make it easier for domestic companies to compete against global card processors and fintechs.

“The industry in Australia is trying to move away from siloed capabilities and applications and products, to a more ecosystem-centric set of capabilities based around [the consumer’s] context and experience,” said Simon Birch, executive general manager at CBA, speaking at a recent conference.

CBA and other big banks want to use the infrastructure of AP+ to offer payments, loans, and other services via retailers, healthcare services, transportation, and schools.

At the same time, they want to put a lid on the rising costs of operating a growing number of payment channels, which now includes QR codes, and protocols such as global ISO messaging standards.

With AP+, the banks can streamline domestic standards, consolidate cybersecurity, and make data easier to share – with themselves.

The underlying companies have had some success with cross-border projects. BPay has enabled some cross-border billing. NPP was involved in experiments with SWIFT to link with other faster-payment systems in Asia.

The lack of compliance controls around those money movements have put any rollout on hold; NPP was slated to resume these in 2022 with improved know-your-customer tools, but whether it does so as part of AP+ is yet another unknown – as is the question of whether Australia, having created AP+, will use it to wedge its way into the region’s innovation economy.

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