What corporate treasurers need to know about the evolving payments landscape in Australia
The digital age is upon us, and ‘digital natives’ are raising the bar when it comes to customer experience – and transforming the future of payments in the process. As the payments industry enters this next phase of innovation, it is critical to prepare not only for a new raft of challenges, but a whole new set of opportunities.
Digital payments are becoming increasingly popular in Australia, with consumers embracing new technology including mobile wallets and contactless payments. During the global pandemic, the digital payments movement swiftly accelerated from aspiration to reality, reaching heights at a pace that few anticipated. The transformation in Australia has been amplified by:
An evolving regulatory landscape: New regulatory proposals, including updating the Payment Systems Act 1998 (PSRA) and the establishment of a modernised payments licensing framework will put in place a more equitable playing field for service providers seeking access to payment systems. These changes are also set to drive increased competition and continued innovation.
Technological advancements: APIs, digital wallets, and DLT/blockchain are transforming the consumer experience, enabling faster and simpler transactions, improved data privacy and security, and enhanced accessibility.
Emerging payment rails: The New Payments Platform (NPP), launched in February 2018, has enabled real-time payments, and provided a faster and more convenient way to transfer money. The addition of new services like PayTo and International Payments Service will support faster cross-border payments.
Shifting consumer expectations: Advanced APIs, AI technology, data analytics tools and sophisticated security measures can really create an ecosystem of connectivity. This is driving consumer demand for a more personalised, secure, and real-time payments experience. Businesses that can deliver on this are more likely to capture the hearts and wallets of their customers.
Fraud on the rise: With the increasing digitalisation of payments, scam and fraud are also on the rise. Last year, Australians lost over US$341 million to scams, according to the 2022 ACCC Targeting Scams report. Also in 2022, fraud on payment card transactions was at US$366 million, with card-not-presented (CNP) fraud at US$328 million. The introduction of richer data enabled by ISO20022 and biometrics, coupled with advanced AI, has enabled stronger fraud preventative measures. Some domestic banks are also adding a friction point into consumer payment journeys, including additional verification measures to combat scams. These friction points aim to slow down payment authorisation and prompt the customer to undertake additional reviews – a required trade-off between payment speed and fraud prevention.
A roadmap for Australia’s payment system
Australia has long positioned itself as a strategic leader on the global payments stage, heralded for its approach to contactless payments and strategic infrastructure developments like NPP. As the landscape continues to evolve, the government has responded with a strategic plan for the future of Australia’s payments system.
The plan outlines key priorities and supporting initiatives including:
• Promoting a safe and resilient system
• Updating the payments regulatory framework
• Modernising payments infrastructure
• Uplifting competition, productivity, and innovation across the economy and
• Making Australia the leader in the global payments landscape.
The plan aims to prioritise payments initiatives and investment based on policy objectives, and to modernise payments regulations and ensure a ‘same risk same rules’ approach.
Three key considerations as we prepare for the future:
Embrace digital innovation: True treasury transformation is more than simple electronification or digitalisation of products and solutions. Treasury and finance departments should continue to explore digital innovations that will transform businesses, including modern technologies like mobile wallets, contactless payments, and emerging real-time payments like NPP/ NPP PayTo to optimise liquidity. It is important to understand the value and efficiency of APIs, and how data can better serve your business.
Stay informed about payment trends: Remain engaged and join industry discussions on the latest trends and developments in the payment landscape and adapt your strategy accordingly.
Prioritise compliance and security: Cybersecurity will continue to be a focal area as the eco-system expands to accommodate new infrastructures and new entrants. Proactive vigilance is key — stay informed about the latest cybersecurity trends and threats, establish robust policies, and enhance security measures to manage risks such as fraud and cyber threats.
It is imperative for companies to identify a reliable banking partner with the expertise, capabilities and reach that can help you navigate the intricacies presented by the region, while positioning your business for growth.
 Australian Competition and Consumer Commission. (2023). Targeting scams - Report of the ACCC on scams activity 2022.
 Australian Payment Network. (2023). Australian Payment Fraud 2023.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of J.P. Morgan, its affiliates, or its employees. The information set forth herein has been obtained or derived from sources believed to be reliable. Neither the author nor J.P. Morgan makes any representations or warranties as to the information’s accuracy or completeness. The information contained herein has been provided solely for informational purposes and does not constitute an offer, solicitation, advice, or recommendation, to make any investment decisions or purchase any financial instruments and may not be construed as such.