Strip banks, credit cards of digital payment powers: Productivity Commission report
Australia’s biggest banks and global payments schemes must have self-regulatory powers covering digital payments and infrastructure access forcibly removed to dismantle a harmful oligopoly.
That’s the radical call from the Productivity Commission’s inquiry report into Competition in the Australian Financial System.
Released Friday, the in-your-face tome has left institutions and regulators reeling from the depth of criticism levelled at them.
Describing Australia as having “an oligopolistic banking system” it’s a blueprint for an earthquake rather than a shake-up.
$1.0 trillion restructure
If implemented, the reforms would drastically restructure how payment flows of $1.0 trillion – yes trillion – would be regulated.
It would also redefine the landscape for how tens of billions of dollars a year in financial technology – from smartphone payments to mainframes – would be controlled and structured across the Australian economy.
The reforms would also demolish around 40 years of staid convention and regulatory canon that have underpinned consumer and business transactions since the introduction of electronic payments in the early 1980s.
In their place, an open access regime for critical shared infrastructure like the New Payment Platform (NPP) backed by bans on billions of dollars of lucrative interchange, transaction and merchant service fees would be imposed.
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