The Reserve Bank of Australia has released its risk assessment into the payments industry’s proposed decommissioning of the Bulk Electronic Clearing System (BECS).
The Bulk Electronic Clearing System (BECS) is Australia’s primary system for account-to-account (A2A) payments, including welfare, pension, salary, and bill payments.
In 2023, industry announced intentions to decommission the BECS framework, identifying 2030 as the target end date.
The 2030 date was conditional on all BECS payments having successfully migrated to safe and reliable alternative payment systems.
The majority of BECS transactions are expected to migrate to Australia’s fast payments system – the New Payments Platform (NPP) which processes payments individually in real time and on a 24/7 basis. As BECS is a batch-based system, migration of A2A payments from BECS to the NPP would require a fundamental change in how these critical payments are processed.
The RBA’s risk assessment on the intended decommissioning of BECS concludes that industry is yet to arrive at a shared vision of the desired features of account-to-account payments in Australia and that there has been insufficient industry coordination, planning and certainty regarding the transition.
The risk assessment makes a set of recommendations for industry to consider:
- define a vision for the target future state and strategic objectives for account-to-account payments in Australia with a governance and coordination framework, in collaboration with the Government and the RBA and with due recognition of public interest considerations;
- comprehensively consider alternative options for achieving that target future state;
- once a target future state has been agreed upon, establish a transition plan that includes appropriate mechanisms for coordination and stakeholder engagement.
The RBA concludes that “The breadth of change taking place in the A2A payments landscape highlights the need for the Government to continue to work with the RBA and other regulators to ensure they have appropriate powers to enable them to adequately supervise payment systems into the future. “
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
