Battle lines drawn for Australia’s future payments systems

Major changes to the ownership of Australia’s payments systems could be on the cards. Picture: Brendan Radke.

A major battle has started in the $1.2 trillion payments system, with EFTPOS boss Stephen Benton taking on the Reserve Bank’s efforts to combine different systems into one.

The RBA has proposed putting its digital New Payments Platform (NPP) together with EFTPOS and the big bank controlled BPay under one roof.

But Benton is resisting.

Now Benton has unveiled his latest acquisition, Beem It, an app owned by Westpac, CBA and NAB which allows you to transfer money without having to go through your own bank’s platform.

Last week he contracted with Verrency, a loyalty program for EFTPOS users.

Having acquired the new digital services Benton needs to link with one of the big supermarkets to boost his customer base via Beem It.

EFTPOS is owned by all the big banks, credit union, Coles, Woolworths and others and it doesn’t want to be out under the control of the RBA.

Benton’s fight comes as the federal government has established an inquiry under Scott Farrell into the payments system.

The Treasury inspired inquiry kicked off in October and runs to April next year and it runs at the same time as the RBA review into the systems merger.

Ironically enough, the Australian Payments System boss overseeing the merger is Robert Milliner, who used to be the chief executive of Mallesons, where Farrell is a present partner of what is now known as King&Wood Mallesons.

Farrell is a payments guru who also helped implement the Productivity Commission’s report on consumer data rights.

This is the empowerment of consumers to control their own bank, energy and other data to open the way for more competition.

The concern is just as this is happening the RBA is trying to shut down competition by merging EFTPOS with its own successful digital new payments platform and the big bank controlled BPay system.

All of the above dictate how your money is transferred and traditionally the big bank control of the system has blocked new competition in financial services.

As McLean Roche’s Grant Halverson argues, “the once in a generation opportunity is to develop the lowest cost, real time digital payment system for Australia – not replicate the current Anglo/US expensive legacy system with its entrenched four bank oligopoly and the current high prices.

“When I look at the current political landscape I am concerned – the banks have been busy unwinding most of the Hayne Royal Commission – is this another step?”

EFTPOS’s Stephen Benton hasn’t publicly declared war on the RBA’s Dr Tony Richards who is overseeing the merger plans, but the battle lines are now more firmly drawn and it’s game on.