Banking Review

RBA closely watching project M@MBO

Reserve Bank head of payments policy Michele Bullock has told Online Banking Review the bank is “watching closely” the M@MBO project currently being considered by banking members of bill payments scheme BPAY.

The proposal would see individuals register for their own BPAY code which could be used to facilitate payments. Consumers could then port their number from bank to bank without the need to re-establish direct debits or credits, and use it to enable online payments.

Questioned by Online Banking Review at yesterday’s Banktech summit, Bullock told the audience the project is a very interesting test case for industry co-operation. “Some say you don’t need any co-operation to get innovation … We don’t agree.”

Commonwealth Bank credit cards GM Stephen Karpin threw his support behind the scheme. “The M@MBO project is a great customer value proposition so we think it’s something we should get behind and work collaboratively with our competitors to set the network up. We’re very keen to do it.”

However, if all parties fail to agree, the project could stall. Bullock says: “Payment industries have this problem of the slowest mover. You can only move as fast as the slowest person is willing to move, and this is a real problem I think in Australia.

“If you can’t get all four of the largest banks on board then the project won’t go ahead. So all one has to say is ‘We’re not ready yet thanks’, and the whole project stalls.”

Distra CEO Mike Aston says regulation has been the biggest motivator around the world and could be the only thing that drives local banks to invest in payments network innovation.

“The problem comes back to what appetite there is for change,” says Aston. He argues that the cost of change is often overstated. “Why is it perceived as so expensive? Because there is this kind of aura around legacy systems and there are industries that make good money out of that.”

But Bullock says “We have no plans to regulate in this space. Really what we’re trying to focus on is what the impediments are to effective co-operation.”

P.S – I’ve recently become a Twitter convert, and have been twittering the Banktech summit at #Bnktch http://twitter.com/charispalmer