Australia’s Central Bank Chief Outlines Four-Pronged Strategy for Payments Modernization

Modernization Priorities for Australia’s Payment Infrastructure

Reserve Bank of Australia Governor Michele Bullock has outlined four critical areas for modernizing the nation’s payments system, according to reports from her recent address. Sources indicate the central bank is collaborating with government and industry stakeholders to enhance both innovation and security within Australia’s financial infrastructure.

Modernization Priorities for Australia’s Payment Infrastructure
Overhauling Core Payment Systems
Cross-Border Payment Enhancements
Combating Evolving Fraud Threats
Strengthening System Resilience
Maintaining Cash Accessibility

“Innovation and resilience are not opposing forces – they can, and should, reinforce one another,” Bullock stated in her speech, which analysts note deliberately avoided monetary policy discussions. The governor emphasized that regulators are working with industry and government to achieve outcomes benefiting the broader public.

Overhauling Core Payment Systems

The first priority reportedly involves upgrading Australia’s account-to-account payment infrastructure, beginning with replacing the aging Bulk Electronic Clearing System (BECS). While BECS remains reliable for payroll and welfare transfers, the report states it lacks modern capabilities like real-time processing and detailed payment information, both available through the New Payments Platform.

A roundtable including the RBA, Treasury, and industry groups is working toward a vision for the system’s replacement by year-end, with an implementation plan due by mid-2026. According to the analysis, the process will weigh trade-offs between cost and reliability, legacy systems and innovation, and differing user priorities.

Cross-Border Payment Enhancements

The second area requiring progress involves enhancing cross-border payments, sources indicate. The RBA is reportedly working with industry to adopt new data standards and infrastructure that could make international transfers faster, cheaper and more transparent for Australian consumers and businesses.

Combating Evolving Fraud Threats

Tackling fraud and scams represents the third priority, with Bullock noting this will demand continual innovation as criminal tactics evolve. The governor specifically cited preparations for quantum computing advances by migrating card systems to the Advanced Encryption Standard, described as a quantum-safe protocol that would future-proof payment security.

Strengthening System Resilience

The final focus centers on strengthening operational resilience, ensuring the payments network remains secure and reliable despite aging systems and deepening interconnections. Reports suggest the RBA is examining how links between systems can amplify outages and how settlement infrastructure may need to adapt to new forms of digital money, including potential central bank digital currencies.

Maintaining Cash Accessibility

Despite digital payment advancements, the Reserve Bank of Australia remains committed to keeping cash viable for as long as Australians want to use it, according to the governor’s statements. Declining cash use has strained distribution networks, prompting regulators to consult on new rules to better manage risks and ensure continued access.

“We are participating in discussions with the major banks, the broader industry and government about how to evolve the operating model to support the future viability of cash,” Bullock said. Work to support a more efficient, sustainable and resilient cash distribution system is reportedly ongoing.

The governor’s speech was followed by a brief Q&A session. She is scheduled to conduct a fireside chat at an economists’ dinner on Monday that analysts suggest will likely focus on recent economic data and interest rates, contrasting with today’s payments-focused address.

References

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