The Reserve Bank of Australia (RBA) has confirmed that its new payments platform rollout is on schedule to begin before the end of the year.
Addressing the House of Representatives Standing Committee on Economics on Friday, RBA Governor Philip Lowe said his organisation's work on building the infrastructure behind the new payments platform is on schedule and currently undergoing industry testing.
"Developments look on track to allow the first payments to be made through this new system towards the end of this year," Lowe said. "Financial institutions are also working hard on their internal systems so that customers can take advantage of the new system."
The new payments platform will allow for near real-time funds transfer between bank accounts, regardless of who people bank with. All a user will require to perform an "instantaneous payment" with the forthcoming system will be the recipient's email address or mobile phone number.
The payments project is a cooperative effort between the bank and the payments industry to modernise key parts of our electronic payments system, which has been actioned under the guidance of the RBA's Payments System Board.
The RBA kicked off the project in 2012 when a review of its internal innovation capabilities laid out "strategic objectives" for the Australian payments system.
These included the ability for users to make real-time payments; send more complete remittance information with payments; address payments in a relatively simple way; and make and receive payments outside of normal business hours.
The RBA then invited input from industry to determine the most effective way of delivering on those objectives.
The following July, the RBA published an expression of interest (EOI) for the provisioning and implementation of the solution. At the time, the bank said it wanted a complete overhaul to help it deliver an improved banking service for its customers with a more contemporary architecture and programming platform.
The EOI specified that the platform would be used to support payments systems that process in excess of 320 million payment and 25 million collection transactions per year.
Mandatory technologies for use was also specified and included using either a Microsoft SQL Server or an Oracle database server; Microsoft Active Directory for identity management integration; and use technologies such as Secure FTP, secure assured messaging technology like MQ messaging, and web services-based integration.
Lowe also said on Friday that a related focus of the payment system board is the important role that technology can play in promoting competition.
"In recent meetings the payments system board has discussed the opportunities that distributed ledger technology could offer in the payments system and financial market infrastructures," he said. "And it's also interested in the potential for fintech to deliver improved customer experiences."
He concluded by saying the board is therefore taking a "very keen interest" in the work that is being done by the Australian Payments Council on digital identity and on customers' access to their banking payments data.