The document summarizes key events and developments from the fourth quarter of 2017 related to the payments industry in Australia. It discusses the establishment of two new forums for industry collaboration: the P7 Think Tank and the Australian Payment Summit. It also covers topics like payments fraud trends, regulatory reviews and submissions, and upcoming industry events.

1. Payments Monitor
Fourth Quarter, 2017
CEO's Corner
The final quarter of
2017 culminated in the
establishment of two
exciting new forums for
industry collaboration:
the Australian Payment
Summit and the P7
Think Tank.
The final quarter of 2017 was consistent with the whole of the calendar year, passing at
lightning speed, culminating in the establishment of two exciting new forums for industry
collaboration. The first of these is in the form of a new global payments think-tank, and
the second is a new Australian payments summit.
We are grateful to have initiated and hosted the P7 Think Tank, a new APAC and pacific rim
collaboration involving seven prominent payment organisations. This group will meet
annually to exchange insights and perspectives on payment trends, innovation,
challenges and emerging strategic themes.
One of the standout lessons from our first P7 Think Tank is that the East has spearheaded
an app-based approach to payments innovation. And this type of innovation has spread
beyond China and India to many other Asian countries. This has resulted in an explosion of
payment apps that support the introduction of further technology – such as audio QR, that
enable rapid and frictionless transfer of value via mobile phones. These new Asian
developments are not limited to app-based solutions but also include innovative
initiatives such as the recent collaboration in the form of an MOU between five Asian
countries to address real-time cross-border payments.
These developments in Asia underpin a theory recently put forward by the World Economic
Forum (WEF) about nascent regionalisation of payment centres. The WEF argues that
three regional payments centres are developing, each with its own unique technology and
infrastructure characteristics. The first, emanating from the East and led by China, is the
world of app-based payments centred on the mobile phone.In this paradigm, traditional
point-of-sale and card-based payments are fast becoming obsolete. The second centre,
based in Europe, is dominated by a new world where open data supports the entrance of
new participants, leading to the introduction of unique newpayments solutions. The third
and final regional centre is in the US, where the world of card and point-of-sale remain
central to the payments economy.
If the WEF is correct, and I would argue their perspective has merit, then the question to
ponder is where will Australia land in our five to ten year horizon. I see an argument
emerging that aligns our economy to Europe, as we move towards a world of open data.
However, the Asian mobile app-centric model also seems plausible.
Australia’s payment economy is sophisticated. On the one hand, we have world-leading tap
and go payment behaviour, with contactless payments now accounting for 66% of in-
store purchases. On the other hand, we have exceptionally high levels of smartphone
penetration, and according toPayPal’s 2017 mobile commerce index, 65% of Australians
have shopped via a mobile app.
I look forward to the year ahead during which we will be involved in helping our own future
take shape and unfold. Perhaps we will create a fourth payment centre of our own!
On a final note, I’d like to thank all our members and stakeholders for the invaluable
contributions that made our inaugural Australian Payment Summit a day to remember. We
will be in touch to learn how we can grow this event in 2018.
Latest BlogsPrevious Issues

2. AusPayNet Events
We were delighted with
the attendance and
enthusiastic support for
our inaugural Australian
Payment Summit.
Australian Payment Summit
Our Inaugural Australian Payment Summit held in December brought together
over 250 participants to discuss key trends in payments in Australia and around
the world.
We were delighted to have Dr Philip Lowe, Governor of the Reserve Bank of Australia,
present the opening keynote. In examining a series of working hypotheses around
whether the RBA intends to issue an eAUD, DrLowe shared insight into the RBA’s
perspective on what the future might look like.
The theme for the summit: “Towards a New World of Payments”, included deep-dive
discussions around digital identity, open banking and payments fraud, often drawing
on UK and European experiences.
For more details about the event click the link below to our recent blog post. To
remain up-to-date with details of our 2018 events, please get in touch.
Industry News
There have been a
number of changes to
the AusPayNet Board.
Board Updates
In recent months, there have been a number of changes to our Board.
Paul Franklin, General Manager Payments at National Australia Bank joined the
AusPayNet Board in October 2017, replacing Rosanna Fornarino.
Mr Franklin has also taken over as Chairman of the cheques clearing system (APCS)
management committee, a role held by Ms Fornarino since joining the Board in
February 2016.
Olivia McArdle, Head of Deposits and Payment Products at Macquarie Bank
Limited, was elected to the Board by Electing Members in November 2017.
Ms McArdle fills the vacancy left by Simon Babbage’s resignation earlier that month,
after serving on the Board since October 2016. Ms McArdle also replaces Mr Babbage
as Chairman of the high value clearing system (HVCS) management committee, and
serves as member of the Remuneration and the Audit, Risk & Finance committees.
We extend a warm welcome to Mr Franklin and Ms McArdle, and thank Ms Fornarino
and Mr Babbage for their contribution.
Director role rotation
We are pleased to advise that Anne Collard has been appointed AusPayNet Deputy
Chair and Michelle McPhee, Chair of the Audit Risk and Finance Committee.
They replace Stuart Woodward and David Jay, who stepped down from the respective
roles after completing two consecutive terms in December2017. We extend our
appreciation to Mr Woodward and Mr Jay. Both directors helped to significantly shape
the Company during their terms in these roles.
Mr Woodward continues to serve as Chairman of the Fraud in Banking Forum and Mr
Jay as a member of the Nomination Committee member.
Click on the link below for more details on the AusPayNet Board.
Australian Payment Summit Blog
AusPayNet Board Members

3. We publish payments fraud
data twice-yearly. The
December 2017 release,
covering the 12 months to
30 June 2017, reflects
recent trends.
Payment Fraud – Mixed Results
The interim payments fraud data we released in December 2017 reflect recent
trends. Chip technology is providing strong protection against counterfeit cards,
and most card fraud is occurring in the online space.
Australians made more than $730.1 billion worth of card transactions in the 12
months to 30 June 2017 - a 3.8% increase on the previous year. Card fraud increased
at a slightly lower rate – 3.1% - to $538.2 million. Within thisfraud total:
• Counterfeit/skimming fraud dropped 34% to $42.2 million.
• Card-not-present (CNP) fraud increased 10% to $442.9 million now
accounting for 82% of all fraud on Australian cards.
The significant drop in counterfeit/skimming fraud is likelydue to the industry’s roll-
out of chip-reading at ATMs in Australia and close cooperation with law enforcement,
as well as the steady adoption of chip technology in the United States. As a result,
fraud is migrating to online channels. Other factors to consider are the popularity of
online shopping and the global trend in cybercrime.
Tackling CNP fraud remains a high priority for industry. Next month, we are holding a
stakeholder Accelerator Forum, in co-operation with the Reserve Bank of Australia, to
expedite industry-wide solutions for addressing CNP fraud in Australia. Please get in
touch if you would like more information.
A comprehensive payments fraud report covering data from 1 Jan to 31 Dec 2017 is
due for release in mid-2018.
Regulatory Round-up
In this quarter, we lodged
submissions to the
Government’s consultations
into The Digital Economy,
and the Review into Open
Banking in Australia.
The Digital Economy: Opening up the Conversation
In late 2017, AusPayNet lodged a submission to the Government’s consultation
paper, The Digital Economy: Opening up the Conversation.
The consultation had a broad scope including areas relevant to the payments
industry such as digital technology and infrastructure, data sharing, standards,
cybersecurity and digital literacy.
Among other things, AusPayNet’s submission highlighted that:
§ Australia’s world-class payments system underpins our digital economy. In
recent years, the industry has invested heavily to build new infrastructure, to
ensure it continues to support Australia’s digital economy into the future.
§ The digitalisation of the global economy presents both challenges and
opportunities to the payments system. A self-regulatory approach, which
has helped deliver Australia’s world-class payments system, continues to be
the most appropriate way to navigate these challenges.
§ With the emergence of new business models, government also has an
important role to play in ensuring the safe and efficient adoption of new
Fraud Statistics

4. technology through the creation of principles and guidelines in addition to
public infrastructure investment and fostering digital literacy for all
Australians.
The Government will use the review to inform its Digital Economy Strategy, which will
focus on how Australia can adjust to seize the benefits of digital transformation.
Minister Sinodinos noted that the performance of Australia’sdigital economy has
been mixed. Analysis by McKinsey suggests digital technologies could contribute
between $140-$250 billion to Australia’s GDP by 2025. The Digital Economy Strategy
would be “a forward-looking plan to maximise the potential of digital technology to
improve the nation’s productivity and competitiveness, while minimising its negative
effects”.
The Government is expected to launch its Digital Economy Strategy in the first half of
2018.
Our submission to the Digital Economy Conversation can be accessed by clicking on
the link below.
Review into Open Banking in Australia
With open banking now launched in the United Kingdom, industry and
government in Australia continue to explore the implications and requirements
for our jurisdiction.
In late 2017, AusPayNet responded to a Government Issues Paper, Review into Open
Banking in Australia. The Paper canvassed views on the most appropriate model for
Open Banking in Australia, a regulatory framework under which an Open Banking
regime should operate, and a roadmap and timetable for itsimplementation.
Our submission highlighted that an open banking regime should be underpinned by a
robust governance framework. This will help ensure that all parties, including
consumers, data providers and third parties have confidence in the system. At a
minimum, an effective governance model must be transparent, open to all
participants (provided they are licensed and accredited), facilitate new technologies
and consumer needs, and champion consumer interests.
The payments industry is of the view that participants should come together to agree
a governance structure and operating rules, and that there must be continuous
management through an accreditation regime.
The report of the Open Banking review was due to the Treasurer, Scott Morrison by the
end of 2017. The Government is understood to be considering the report and looking
to release a response in early 2018.
Our submission to the Open Banking Review can be accessed below.
Submission - The Digital Economy
Submission - Open Banking Review

5. We provide an update on
the Productivity
Commission Review into
Data Availability and Use
as well as Competition in
the Australian Financial
System.
Update on Productivity Commission Reviews: Data Availability
and Use and Competition in the Australian Financial System
In July 2017, the Productivity Commission (PC) commenced an inquiry into
Competition in the Australian Financial System.
The Consultation Paper released at that time identified the payments system as
foundational infrastructure for our financial system. A Draft Report is slated for
release shortly after Australia Day, with the Final Report due in July 2018.
While the Government has yet to formally release its full response to an earlier report
from the PC into Data Availability and Use, it has announced the adoption of one of the
Report’s core recommendations. On 26 November 2017, Angus Taylor, Minister for
Digital Transformation, announced that the Government will bring forward legislation
for a national Consumer Data Right in 2018. The Consumer Data Right will allow
customers open access to their banking, energy, phone and internet transactions.
Both inquiries were established as a result of recommendations made in the 2014
Financial Systems Inquiry: to periodically review the state of competition in the
sector, and to review the costs and benefits of increasing access to and improving
the use of data.
Industry Events
We hope you can join us
at the following
upcoming industry
events and forums.
APAC Blockchain Conference 2018
The 2nd
annual APAC Blockchain conference will be held in Melbourne on 13 – 15
March 2018.
The event will focus on exploring the opportunities and addressing the key challenges
to mainstream blockchain adoption.
Nick Cliff, our Emerging Technology Lead, will join the panel discussions around the
Outlook for Standards and Regulation for Blockchain-Based Applications. Nick
represents the payments industry on the Standards Australia committee for
blockchain and distributed ledger technologies.
We are pleased to be part of this progressive event bringing together those at the
forefront of blockchain technology.
For further information on the conference, and to view the agenda, click on the link
below.
APAC Blockchain Conference 2018

6. Money20/20 Asia
On 13 – 15 March 2018, the premier global event for payments, Money 20/20 will
launch Money20/20 Asia in Singapore.
Money 20/20 takes a unique and widening perspective on payments. It brings
together the visionaries and innovators who are inventing new ways to spend,
manage, save, borrow, share and protect money.
The Asia event is expected to attract some 15,000 participants and has an agenda
covering 15 themes that capture a broad range of topics around creating the future
of money.
We are delighted that our Chief Strategy Officer, Victoria Richardson, will be a speaker
at this mega inaugural event.
For more information on Money20/20 Asia click on the link below.
Digital Identity Summit 2018
This two-day event in Sydney on 26-28 March 2018 will look at “building cyber
fraud resilience and improving delivery of service through innovative Digital ID
technologies and systems”.
Victoria Richardson, will be a keynote speaker at this event,focussing on the potential
for digital identity to improve the Australian consumer experience. We hope you can
join her session.
Further details on the Summit can be viewed by clicking on the link below.
BLOGS
Click through on the images below to read our recent blogs.
Digital Identity Summit 2018
Money20/20 Asia 2018