Australian Payments Clearing Association

Annual Review 2013

Collaboration for a better payments system The Australian Payments Clearing Association is the self-regulatory body set by the payments industry to improve the safety, reliability, equity, convenience and efficiency of the Australian payments system.

2 3 Every day, the Australian payments system moves more than $150 billion Two out of every three across the economy for non-cash payments made consumers, businesses, in are transferred government and non-profit across accounts using one CONTENTS NAVIGATING THIS REPORT organisations. /7 of APCA’s various systems. 2_ About APCA 10_ Improving Australian 24 Go to contents Australians are among the 3_ A snapshot of the payments payments environment 20_ Board of directors Go to next page heaviest users of electronic payments in the world ranking 4_ Key milestones 22_ Governance framework Australians have access Go to previous page ahead of the United States, 5_ Chairman’s report 23_ Decision-making bodies to some 30,000 ATMs, Go to page United Kingdom, France 6_ CEO’s report 24_ Our Team 780,000 POS terminals Go to external link and Germany. 7_ The Australian 25_ Membership and online, telephone and mobile banking payments environment 26_ Glossary facilities 24 hours a day, 7 days a week.

Australian Payments Clearing Association Limited 1 ABN 12 055 136 519

contents APCA exists to advance the common interest of our members and the interests of the Australian public in improving the Australian payments system.

APCA DOES THIS APCA AND THE AUSTRALIAN THROUGH: PAYMENTS SYSTEM • enabling competition Australia’s payments APCA has a pivotal and innovation; system is financial coordinating role in • promoting efficiency; plumbing for the economy. the payments system. and It is the infrastructure – We manage various • controlling risk. APCA payments instruments, systems for the efficient organisations, technology, exchange and settlement procedures and rules – of funds among financial that ensures the smooth institutions and other transfer of funds from one payments providers. OUR ROLES APCA has more than 90 members We work with account to another. INCLUDE comprising leading financial government and PROVIDING: institutions, major retailers and other public regulators and payments service providers. undertake our activities • thought leadership and We provide a venue for industry with transparency, advocacy; cooperation and collaboration fairness, rigour and • industry collaboration; to improve the Australian integrity. • self-regulation; and payments system. • system-wide standards.

$ ¢ $$ ¢¢ APCS BECS CECS HVCS ACDES

APCA SYSTEMS Australian Paper Clearing Bulk Electronic Clearing Consumer Electronic High-Value Clearing Australian Cash The COIN Infrastructure System System Clearing System System Distribution and Exchange System System for cheques for electronic payments for aspects of ATM and for settlement of connectivity for including direct debit POS transactions high-value, real-time for trading of bulk coin APCS, BECS, CECS and direct credit (direct entry) payments and notes between banks and potentially for other payments

2

contents A snapshot of the payments environment The world is changing and so are payment systems. New user demands, new technology, competition, and regulation are all evolving. These drivers are bringing about more convenient, secure, faster and valuable ways of paying.

2013

MOBILE PHONES DEBIT CARDS There are over 8 million CASH ECONOMY In 2013, there is the smartphone and 4 million tablet The “cash economy” in 2003 equivalent of three debit users in Australia. Of those, over % Australia is equivalent to card transactions per week 2 million Australians paid a bill GDP about 1.5% of GDP or about for every Australian. Ten or made a purchase using their $20 billion. years ago, this was only smartphone by mid-2012. 1.5 one transaction.

M CHEQUES DIRECT DEBITS 20 ONLINE SHOPPING 45 In the month of June $22 B AND CREDITS In the 12 months to June 2013, less than Direct entry is the 2013, Australian online 15 million customer workhorse of the X retail spending totalled cheques were used CREDIT CARDS Australian payments % $13.9 billion – equivalent in Australia. In December 2012, Australians made system. Average daily to 6.2% of “bricks and < M Ten years earlier, $22 billion worth of purchases on values of direct debits and mortar” retailing (excluding 15 in June 2003, their credit cards. The first time credits ($40 billion per restaurants, cafes and the figure was Australians spent more than a billion business day) are twenty 6.2 dining). Online sales 45 million. dollars in a month was December times greater than those growth was 14% for the 1987, when $1.1 billion worth of of debit and credit cards year to June 2013. JUN 03 JUN 13 purchases were made on credit cards. ($1.7 billion per day).

3

contents platform > platform new payments Towards a activities. other our alongside work payments “real-time”. For APCA, this has meant awhole new stream of real-time that is increasingly complex and challenging. Our world has become environment an creating is payments evolution market-driven of The milestones Key 4

July service. switching account the enhanced of launch the with operation commences “mailbox” switching new APCA’s

August of Innovation. Innovation. of Review Strategic Australia’s of Bank Reserve the discuss to meets Forum Payments Australian The 2012 Australia. in infrastructure payments new low-value for proposal a develop to committing Innovation, of Review Strategic Australia’s of Bank Reserve the to response industry’s the APCA submits 

September internet. the over fraud card against retailers protect small help to campaign education Online” Fraud Card About Smart “Get the launchesAPCA

October proposal. proposal. industry the on developing work begins organisations, payments leading seven from drawn Committee, (RTP) Payments Real-Time The

December of Australia. of Bank Reserve the to proposal industry the submits Committee RTP The

January reform. reform. governance 2013 of details on members with consult to APCA continues Council. Payments Australian an for aproposal on work jointly RBA the and APCA

February platform. payments new for developing a RTP Committee the by submitted proposal industry the welcomes Board System Payments The

March Australia. in terminals POS and ATMs evaluations on to perform Facility Evaluation a new Approved APCA accredits effect. rules, comes into APCA and Code new ePayments in the included regime, payments mistaken new The

April platform. platform. payments new the discuss to meets Forum Payments Australian The Council. Standards PCI the of member affiliate an APCA becomes digital economy. the to cheques from transition Australia’s track to Report” Milestones Digital Economy: the “Towards APCA releases

contents May Program. Program. Platform Payments New the for Organisation Services Management a Program appointing for process tender the manages APCA

June since 2006. 2006. since fraud card in drop year-on-year first the showing data fraud APCA releases ADIs. Australian all to opened is participation Committee; Steering the joins RBA established; is Program Platform Payments New The CHAIRMAN’S REPORT

Structural reform

A year ago, I observed that the The Reserve Bank’s Conclusions to its In parallel, the board has resolved to put During the year, David Heine left the board stars may be aligning for the structural Strategic Review of Payments Innovation, major reforms to APCA’s constitution to and was replaced by Adrian Lovney; in reform of payments. It is a pleasure, released in 2012, presented APCA with a members at this year’s Annual General August 2013, John Murphy was replaced by if a little surprising, that such a prediction big opportunity. That is to broker industry Meeting. As described in last year’s report, Steve Baric. The Reserve Bank appointed these reforms are designed to recognise Lindsay Boulton to the board in June 2013. comes true – particularly as promptly consensus on the development of an entirely new payments platform for the economy – the diversity of interests in payments arising I express the thanks of the board to David as this one has. something that only happens every 20 years from structural and technological change. and John for their contributions; and a warm or so. The result has been an industry-wide They will also provide a more inclusive, more welcome to Adrian, Steve and Lindsay. program to design a new payments platform, truly representative association. I commend Our staff, too, have laboured mightily this year, as described elsewhere in these pages. This the reforms to members. They have been and can reflect with satisfaction on significant program has led to the commitment of sharp developed carefully and thoroughly. collaborative achievements. As always, the minds and significant resources from the board is in debt to them. I express my deeply leading payments organisations of Australia, Our community felt appreciation of the vision and leadership of including the Reserve Bank itself. Such a I express my thanks and appreciation to our CEO, Chris Hamilton, in a demanding year. commitment is testament to our ability to member executives who have found time collaborate for the overall enhancement of the in already crowded diaries to work on major I retire as chairman at the end of December Australian payments system – thus validating and time-consuming industry projects – this 2013. It has been a challenging six years. I APCA’s mission. year more than ever. If the payments system wish the APCA board and management well is the plumbing of the economy, we rely on for the future. I have no doubt that APCA’s Industry Governance these expert “plumbers” not only to ensure mission will continue to evolve and develop, There has been good progress on holistic that today’s economy is supported seamlessly fruitfully; and that the Australian economy will reform of the industry’s collaborative and efficiently, but also to ensure that the be the better for it. framework for setting overall payments system economy of the future is equally well served. direction – although my optimism on timing in My board colleagues figure significantly in last year’s report was not quite so well-placed. this community. Typically they provide a vital APCA and the Reserve Bank have developed junction between their own organisations and RUSSELL RECHNER a proposal for a new, high-level Payments APCA, as well as contributing to the definition CHAIRMAN Council to consult with the Bank’s Payments and realisation of our mission. I thank them System Board on strategic direction of the for their contributions. payments system. We will continue to consult on the proposal over coming months. 5

contents CEO’S REPORT The Australian payments community is living through challenging times

From an era of stable, utility payments With this changing environment as I think the Review also shows how much networks supporting competitive markets background, the board’s strategy work has more there is that we can do together, even for payment services, we are increasingly elaborated on our core purpose – advancing as the competitive landscape becomes faced with changing end user demands members’ interests and the public interest in more demanding for competing payment organisations. As always, a balance must and expectations, rapid technological improving our payments system – into four strategic objectives that define APCA’s “key be struck between aggressive competition change, greatly increased regulatory and result areas”. We have taken these objectives in services and products that gives public policy interest, structural change to as thematic signposts to report on our customers what they want at the best price, networks and new kinds of competition. activities this year. In the pages that follow, and collaborative work that enhances the Our overview of the changing payments you will find information on: underlying platform for competition. environment in the following pages adds • Enhancing payments infrastructure; For me as CEO, continuously finding that some statistical flavor to these general • Supporting a competitive payments balance defines APCA’s success. observations. marketplace; • Improving public awareness of and trust in the system; and Russell Rechner has announced that he will step down in December 2013 after six successful • Promoting self-regulation and CHRIS HAMILTON years in the chair at APCA. As Russell noted in self-governance. CEO his report, David Heine, our deputy chairman, resigned from the board during the year. This Review demonstrates, I hope, that in I express my sincere thanks to both of them each of these areas collaborative effort by for their support and direction. APCA’s members is yielding enduring benefit for members’ own payment businesses, for our community and for our economy.

6

contents The Australian payments environment

150 The payments system serves every aspect The world economy struggled throughout OVERVIEW OF CONSUMER PAYMENTS Source: APCA, RBA of the economy. Changes in economic the 2012–13 financial year. Following the 150 activity drive structural changes in the economic crisis in Greece, the Euro area spent most of the year in recession, with a 120 payments system. Identifying economic 120 trends and drivers is always the first step glimmer of growth emerging in mid-2013. The United States economy clawed its way in strategic decision-making for the 90 out of recession with annual GDP growth for payments system. the year reaching 1.4%, with similar modest 60 growth rates seen in the United Kingdom.

China had single digit growth rates closer to 30 7% rather than the heady days of 14%, while 0

Indian growth drifted below 5% in 2013. PER CAPITA NON-CASH PAYMENTS 97 99 01 03 05 07 09 11 13 Australia’s economic growth continued to be strong when compared to other developed BPAY Direct Debits Direct Credits Debit Cards Credit Cards Cheques economies; however, it has slowed compared to previous levels. GDP growth Direct credit and direct debit usage declined have shown even more spectacular for the 12 months to March 2013 was slightly. Though direct credit values have growth, with volumes and values tripling 2.5%, well behind the impressive 3.7% GDP increased steadily over the past 10 years, over the same period. The annual holiday growth seen in the 2011–12 financial year. a modest decline was similarly observed shopping frenzy saw December 2012 between 2008 and 2009. This suggests that shatter previous records with monthly Consumer payment trends the reduced direct credit values may be a credit and card charge purchases at Despite an uncertain economic environment, reflection of depressed economic conditions. 171 million, worth $22.5 billion. Australians continued to embrace electronic ATM usage was similarly muted, likely as According to BPAY, one of Australia’s and card-based payments and to increasingly a result of economic conditions as well successful online payment offerings, abandon the use of cheques. Cheque as a reflection on system maturity and, 75% of Australian adults use BPAY, with volumes continued to decline as they have potentially signalling a longer-term move 870,000 BPAY payments being made done over the past 15 years. Industry- away from cash. every day. This year, BPAY introduced specific initiatives, such as SuperStream and new offerings such as QR Codes. eConveyancing, will help drive cheques out of Cards remain popular amongst Australians. industries such as superannuation and real values and volumes have estate where they remain in use. doubled in the past 10 years. Debit cards 7

contents THE AUSTRALIAN PAYMENTS ENVIRONMENT QUICK FACTS • In December 2012, the Government, financial • The RBA continued its discussions with the institutions and independent ATM providers card schemes on the regulatory treatment of moved to address special banking needs of “multi-function” or “combo” cards. A voluntary remote indigenous communities by committing resolution was announced in August 2013, to fee-free ATMs in these communities. providing for the continued issuing of combo • Changes to RBA’s standards effective March cards and choice for merchants over routing. 2013 allow card schemes to limit surcharging in cases where merchants are clearly charging consumers more than it actually costs to process a card transaction.

Cheques AVERAGE NUMBER OF CHEQUES PER BUSINESS DAY IN MAY AVERAGE VALUE OF CHEQUES PER BUSINESS DAY IN MAY Cheque volumes in Australia continued their Source: APCA – www.apca.com.au Source: APCA – www.apca.com.au long-term decline in 2013, with less than a million cheques 2.0 8 now being used each business day. Over the past decade, cheque volumes have declined by nearly two-thirds. 1.5 6 The dramatic decline in cheque values first seen in 2011–12 has continued, strongly suggesting the beginning of long- 1.0 4 term decline in cheque values. The daily value of cheques declined from $4.7 billion in May 2012 to $4.1 billion in May No. of cheques Value of cheques 2013. APCA will continue to monitor the decline of cheques 0.5 % 2 % through the publishing of a regular Milestones Report and 20 12.8 undertaking related policy and research activities. 0.0 0 $BILLIONS MILLIONS 09 10 11 12 13 09 10 11 12 13

AVERAGE NUMBER OF DIRECT ENTRY TRANSACTIONS AVERAGE VALUE OF DIRECT ENTRY TRANSACTIONS Direct debits and direct credits PER BUSINESS DAY IN MAY PER BUSINESS DAY IN MAY Direct credit volumes rose slightly, from 4.9 million items per Source: APCA – www.apca.com.au Source: APCA – www.apca.com.au 6 30 day in May 2012 to 5.0 million in May 2013. Direct credit Direct credit Direct credits values, however, declined slightly from $25.3 billion per day % % in May 2012 to $23.9 billion per day in May 2013. 2 5.5 25 Direct debits volumes increased from 2.2 million items per 4 day in May 2012 to 2.4 million in May 2013. Direct debit 20 values, like direct credit values, declined during the same period from $20.7 billion per day in May 2012 to 2 Direct debit Direct debits $19.8 billion per day in May 2013. This decline in value is % 15 % likely linked to slightly depressed economic conditions in 9.1 7.2 May 2013 when compared to the same period in 2012. 0 10 MILLIONS $BILLIONS 09 10 11 12 13 09 10 11 12 13

8

contents THE AUSTRALIAN PAYMENTS ENVIRONMENT EMERGING CONSUMER PAYMENTS • Australia has the highest open-loop • In January 2013, 20% of Australian contactless transactions per capita of any smartphone users used their smartphones for country. There are now over 120,000 online banking, a rise of 17% from January contactless terminals and over 10 million 2012. contactless cards on issue. • Visa has announced it would launch its digital • Closed-loop contactless card systems are wallet, V.Me in Australia, by the end gaining traction. All mainland Australian of December 2013. state capitals now have smartcard transit ticketing systems.

Debit cards TOTAL NUMBER OF DEBIT (SCHEME AND EFTPOS) TOTAL VALUE OF DEBIT (SCHEME AND EFTPOS) The number of point-of-sale and other non-ATM debit transactions CARD TRANSACTIONS IN MAY CARD TRANSACTIONS IN MAY Source: Reserve Bank of Australia – www.rba.gov.au Source: Reserve Bank of Australia – www.rba.gov.au using and scheme debit cards leapt from 245.5 million POS terminal POS terminal 300 20 in May 2012 to 279.6 million in May 2013, an increase of nearly transactions transactions 14%. This is now equivalent to 12 debit card transactions per 13.9% 10.6% month for every Australian. Monthly values jumped by 10.6% 15 from $15.1 billion in May 2012 to $16.7 billion in May 2013. 200

ATM withdrawals, in terms of both the number of withdrawals 10 ATM ATM and the value withdrawn, declined moderately between May withdrawals withdrawals 2012 and May 2013. Overall ATM withdrawal volumes and 100 % % values in Australia have remained stagnant since 2007. This is 5 5 3.1 consistent with a relative decline in cash usage as consumer payment activity becomes increasingly online and mobile and as 0 0 MILLIONS $BILLIONS non-cash methods increase in significance. 09 10 11 12 13 09 10 11 12 13

Credit and charge cards TOTAL NUMBER OF CREDIT/CHARGE CARD TOTAL VALUE OF CREDIT/CHARGE CARD Credit and charge cards have also seen significant growth over TRANSACTIONS IN MAY TRANSACTIONS IN MAY Source: Reserve Bank of Australia – www.rba.gov.au Source: Reserve Bank of Australia – www.rba.gov.au the longer term with volumes and values doubling over the past Purchases and Purchases and 200 cash advances 30 cash advances decade. The number of credit card transactions rose by 6.9% between May 2012 and May 2013, while growth in values was 6.9% 4% up 4.0% over the same period. 150 20

100

10 50

0 0 $BILLIONS MILLIONS 09 10 11 12 13 09 10 11 12 13

9

contents

Improving Australian Payments In the following pages, we catalogue APCA and industry activity to support and enhance the Australian payments system in 2012–2013. We present this work in four outcome categories: • Improving payments infrastructure • Supporting the payments marketplace • Improving awareness of and trust in the payments system • Promoting self-regulation

10

contents IMPROVING AUSTRALIAN APCA is the place where One of APCA’s main initiatives throughout PAYMENTS RESERVE BANK OF AUSTRALIA’S the payments industry comes the year has been supporting the industry INITIAL STRATEGIC OBJECTIVES FOR together to work on improving the response to the Reserve Bank of Australia’s AUSTRALIAN PAYMENTS system we share. Like all network (RBA) Strategic Review of Innovation in • Same-day settlement of all Direct Entry payments (by end 2013) industries, payments requires the Payments System. This response has evolved to become the New Payments • Real-time retail payments (by end 2016) “coopetition” – asking payments Platform (NPP) Program that began in June • Low-value payments outside normal banking hours (by end 2016) participants to collaborate on 2013. systemic improvements of • Send more complete remittance information with payments (by end of 2016) common (and public) interest, The RBA released its Conclusions Paper in June 2012 which outlined a list of • Address payments in simple manner while still expecting them to (by end 2017) initial strategic objectives. The RBA also compete in payment services to articulated the need for close collaborative customers. When, as now, major work with industry to enhance the basic systemic change is on the agenda, platform and network to support these The New Payments Platform this can be a difficult balance, new services. As part of this, there would The proposal outlined new business and the right level of regulatory be more direct dialogue between industry architecture for the future of Australian encouragement is vital. and the Payments System Board (see payments. Now known as the New “Promoting self-regulation”). Payments Platform (NPP), the system will enable fast, data-enriched and simply APCA coordinated a broad industry addressed payments services for consumers response to the RBA’s Conclusions Paper and businesses. This meets the Payments harnessing previous work and debate within System Board’s initial strategic objectives. the industry including in the 2008 Low Value Payments Roadmap. The response was The NPP will comprise basic infrastructure, lodged in August 2012. which all financial institutions, and through them businesses and consumers, connect As foreshadowed in the submission, the to. This will allow payments to be made Real-Time Payments Committee (RTPC) Improving payments quickly between financial institutions and was formed in September 2012 to develop a their customers’ accounts. The system will preferred industry approach for addressing enable funds to be accessible almost as the initial strategic objectives. The RTPC infrastructure soon as payment is received – even when comprised seven senior representatives from the payer and payee have accounts at the Australian banking and mutual sector, different financial institutions. the APCA CEO and an independent chair. As well as being fast, the NPP will be In November 2012, the Payments System versatile. The basic infrastructure will Board released “Core Criteria” to provide support various “overlay” services – specially more detail on how proposed solutions tailored services which individual financial would be assessed. The final industry institutions may choose to offer their proposal was lodged with the Reserve Bank customers. on 8 February 2013 and was welcomed by the Payments System Board at its meeting This multi-layered infrastructure has been the following week. designed to promote competition and drive innovation in payment services. It ensures the NPP will be equipped to meet the market- driven evolution of Australians payments.

11

contents IMPROVING AUSTRALIAN appointed KPMG as program manager to Five same-day settlements will enhance a evaluation pathway has been well used PAYMENTS ensure a well-resourced, highly collaborative critical element of the Australian payments by global vendors with more than 20 new industry program. system. Currently, the direct entry system devices approved during the year. Financial settles once a day, at 9.00am the next institutions now have access to an expanded In order to make the Program as open and business day. Once implemented, settlement range of secure, leading-technology devices. comprehensive as possible, other account- The NPP Program will follow the first five official exchanges. keeping institutions have been invited to KIF assessment APCA is administering the collaborative Moving value during the day will mitigate participate in the Program. By the end of Key injection facilities (KIFs) load industry program to develop the NPP. The counterparty and operational risks as well as August 2013, an additional nine organisations cryptographic keys into POS terminals and NPP Program commenced with the first create a platform for innovation. had joined the initial eight participants in the are critical to the security of these devices. meeting of the NPP Steering Committee on Program. To ensure strong security, KIFs must certify 20 June 2013. The Steering Committee now Securing the card payments infrastructure compliance with CECS rules and PCI rules. comprises senior representatives from the Standards are a critical part of payment Settlement arrangements Last year, we began offering a new KIF Australian banking and mutual sector, an systems providing for industry-wide In December 2012, APCA adopted an industry assessment service for members covering alternative payments provider and APCA. interoperability and security. Automated policy on the evolution of settlement for low compliance with both sets of requirements. An independent chair was appointed in payments literally run on standards. value payments in Australia. Originally identified This streamlined certification process is September 2013. in APCA’s Low Value Payments Roadmap, the PCI-Plus evaluation proving efficient, saving time and effort for The initial six-month phase of the Program APCA endorsed policy envisages five same- In August 2012, we introduced an optional CECS members and for the KIFs themselves. aims to develop business requirements day settlements in the direct entry system PCI-Plus evaluation for vendors who have New AEF for the proposed platform, together with a by the end of December 2013. This reform already achieved PCI device approval. In March 2013, for the first time since 2009, detailed plan and budget for the next phases accords with the objectives articulated by the PCI-Plus allows them to test against a we accredited a new Approved Evaluation of development. The Steering Committee has Payments System Board in the Innovation subset of the APCA requirements to obtain Facility (AEF): EWA-Canada. AEFs are test Review Conclusions from June 2012. approval under the APCA rules. This laboratories that have been accredited by APCA to perform evaluations of ATMs, POS terminals and other cryptographic devices in New payments platform – Australia. There are now six such AEFs: one a new business architecture in Australia, three in Europe and two in North for Australian payments Value and information America. PCI SSC membership On 1 April 2013, APCA became one of three PAYER (e.g. a consumer) PAYEE (e.g. a business) affiliate members of the Payments Card Industry Security Standards Council (PCI OVERLAY SERVICES SSC). This new class of membership is open instructs reports to regional and national organisations that define standards and influence adoption by their constituents who process, store or transmit cardholder data. Through this membership, APCA, along with Cartes BASIC INFRASTRUCTURE Bancaires of France and Canada’s Interac Association, is participating in the working FINANCIAL INSTITUTION FINANCIAL INSTITUTION group that designs and administers standards such as the PCI PIN Transaction Security standards for PIN entry devices.

RBA SETTLEMENT 12

contents IMPROVING AUSTRALIAN As well as working to improve the Account switching made easier PAYMENTS payments system infrastructure, The enhanced account switching service APCA aims to promote effective announced in August 2011 by the then- competition and continuous Treasurer, the Hon. Wayne Swan, began enhancement in payment services operation on 1 July 2012. As outlined in our Review last year, APCA proposed key that rely on the system. These three elements of this service to the Fraser Review goals – better infrastructure, and worked closely with financial institutions effective competition and enhanced and Commonwealth Government on services – are mutually reinforcing, implementation. and much of our work supports From 1 July 2012, it became easier for all three. account holders to switch from one financial institution to another. Under the enhanced service, account holders who want to switch can do so through their new financial institution. This addresses the hesitancy of those account holders who may not wish to deal with their old institution. It also aligns incentives by placing the onus for switching on the new financial institution who is FROM 1 JULY 2012, IT BECAME gaining a customer. EASIER FOR ACCOUNT HOLDERS TO SWITCH FROM ONE FINANCIAL According to statistics released by the INSTITUTION TO ANOTHER. Commonwealth Treasury, 15,500 people had used the enhanced switching service in its first eleven months. We continue to consult with members and stakeholders Supporting the on the service, including exploring further improvements. payments marketplace The account switching service is supported through an electronic “mailbox service”, which is operated by APCA. The mailbox enables financial institutions to exchange documents related to account switching with each other. Currently, there are more than 130 financial institutions connected to the APCA mailbox.

13

contents IMPROVING AUSTRALIAN Financial Claims Scheme PAYMENTS The Government’s Financial Claims Scheme SHAPING INDUSTRY STANDARDS (FCS) gives qualifying account holders APCA plays an important role representing the industry on domestic and global certainty that their deposits, up to a capped standards bodies. value, will be recovered in the event their • ISO 20022 Payments Standards Evaluation Group financial institution becomes insolvent. • ISO 20022 Registration Management Group • ISO / TC68 / SC2 / Working Group 11 The Australian Prudential Regulation Authority (APRA) issued a Discussion • ISO / TC68 / SC2 / Working Group 13 Industry Support Paper in November 2012 setting out further • ISO / TC68 / SC7 / Working Group 10 APCA assisted the superannuation industry proposals for implementation of the FCS. • Standards Australia Committee IT/5 In its submission, APCA advocated that with the implementation of the Government’s • Standards Australia Committee IT/5/3 SuperStream initiative, which introduced arrangements for FCS payouts should be • Standards Australia Working Group IT/5/4 electronic transmissions of superannuation based on existing payment channels and • Standards Australia Working Group IT/5/8 rollovers on 1 July 2013, through should not require financial institutions to participation on a number of industry establish new facilities for this purpose. • SWIFT Australia National Member Group working groups. APCA also represents This was supported in the response paper • SWIFT Australian User Group released by APRA in June 2013 with payment system service providers on the • Payments Card Industry Security Standards Council (PCI SSC) (Affiliate member) recently formed ASX Forum for the Code of electronic payments remaining the preferred • PCI SSC PIN Transaction Security Working Group Practice for Clearing and Settlement of Cash payout option and RBA cheque the residual. Equities in Australia. We also worked closely with financial ePayments Code institutions to provide a set of guidelines to APCA has worked closely with the Australian assist authorised deposit-taking institutions Securities and Investments Commission to meet the requirements in the event that (ASIC) on revisions to the EFT Code of the FCS is triggered. Conduct, now known as the ePayments Code, to simplify the process for recovering mistaken internet payments. These can occur when customers make an error in entering the BSB or account number when using internet-based facilities such as “pay anyone”. The new Code, which came into effect on 20 March 2013, includes requirements to ensure financial institutions give their customers clear information about how to avoid mistaken payments and how to report them in the event they do occur. It also details how a financial institution should go about recovering funds and within what timeframes once it is satisfied that a customer has made a mistaken payment. These requirements have also been implemented in the BECS procedures. 14

contents IMPROVING AUSTRALIAN Part of APCA’s service to the Countering payments fraud Get Smart About Card Fraud Online is PAYMENTS community is helping to ensure that APCA facilitates cooperation between publicly available at www.apca.com.au/ people know what they need to financial institutions on industry-wide getsmart. We continue to work with financial know about the payments system, efforts to counter payments fraud. We institutions, retail associations and forums, and government departments to promote and why it is important for the also liaise with the Australian Crime Commission, the Australian Federal Police this industry initiative among small retailers economy. An important element and the Commonwealth Attorney-General’s and businesses. of that relates to security and fraud Department on payments fraud matters. resistance. Managing the decline of cheques APCA has been publishing cheque and card Consistent with international trends, cheque fraud data twice a year since November use in Australia continues to rapidly decline. 2006 to help raise awareness among A key objective for the industry is to ensure the broader community of fraud risks. a smooth transition to electronic payments Figures published in June 2013 for the as cheques become scarcer and inevitably 2012 calendar year showed a year-on-year more difficult to use, particularly for those drop in payments fraud for the first time who still rely on cheques. since publication began. This reflects the sustained effort and cooperation of card On 30 April 2013, we published the first schemes, financial institutions, merchants in a series of planned reports entitled and law enforcement agencies. Australia’s “Towards the Digital Economy: Milestones migration to chip card technology and the Report”. These reports will review progress extensive use of PINs has reduced the risk against the action plan released by APCA of card skimming. This has allowed the in May 2012 as part of the outcomes of industry to devote more preventative effort the public consultation on cheques. to online fraud, which continues to be a Improving awareness The Milestones Report highlighted challenge as the internet becomes an ever- initiatives and actions being undertaken larger part of daily life. by financial institutions, government and of and trust in the Vigilance in combating payments fraud other stakeholders to provide alternatives remains a key priority for industry. An to cheques and improve access to the important development this year has digital economy. These included roll-out of payments system been Visa and MasterCard announcing an the National Broadband Network, a new alignment of dates for moving to full PIN at nationwide electronic property settlement point-of-sale on their Australian-issued cards system through National E-Conveyancing by 30 June 2014. and the payments industry’s proposal to develop a new payments platform. The next Get Smart campaign milestones report is scheduled for release by In September 2012, APCA launched the Get the end of December 2013. Smart About Card Fraud Online training to help small merchants protect themselves and their customers when doing business online. The training provides video case studies showing real-life examples of how credit card fraud can occur and the resulting impact on a business. It also sets out simple steps on how merchants can detect and protect against online card fraud. 15

contents IMPROVING AUSTRALIAN The payments environment is Governance reforms PAYMENTS changing fast. Competition, Australian Payments Council changing technology, changing APCA has been working with the RBA user demands and government to establish the Australian Payments regulation all present challenges. Council. This new body will enable high- level engagement between industry and APCA’s strategic conviction is that the Payments System Board, a decision self-regulation and self-governance announced by the PSB in the Innovation have critical roles to play, now and Review Conclusions from June 2012. SELF-REGULATION AND into the future. Public regulation The Council will engage with the PSB SELF-GOVERNANCE HAVE can set high-level strategic on strategic objectives and provide the CRITICAL ROLES TO objectives and requirements framework for industry engagement to PLAY, NOW AND INTO for the system, but to realise support outcomes developed as a result of THE FUTURE them into the network efficiently, those objectives. A formal joint RBA/APCA participants need to work together public consultation process is expected to and support self-regulation. commence in October 2013 with a view to having the Council in place by early 2014. APCA corporate governance We are in the final stages of a governance This would bring APCA into line with best reform package that aims to align the way in practice corporate governance. which APCA is managed with its increasing focus on industry policy and strategic issues. The proposed changes are expected to The Constitutional amendments will be better position APCA to support whole-of- brought to the Annual General Meeting in industry initiatives while increasing regulator October 2013. confidence and enabling industry self- determination. As part of the board’s proposed changes, Promoting APCA’s traditional clearing system Supporting the card system participant membership will be opened up Australia’s debit cards and credit cards to all participants in the Australian payments are governed by the rules of the domestic self-regulation system, including operators of non-APCA and international card schemes (eftpos, payment systems. This would enable them MasterCard, Visa, AMEX and Diners) as to influence the development of industry well as APCA’s CECS rules. To support the strategy and policy. rapid evolution of the cards system, APCA is exploring how best to manage those areas The way in which directors would be of card payments that are non-contestable selected and the votes they would each or cover all the card schemes. These hold would more accurately reflect levels include ATMs, card and PIN security (e.g. of participation across the various payment PIN pads and key injection facilities), fraud systems. Moreover, independent directors and terminal statistics and settlement. with voting rights would be appointed The objective is to establish effective to ensure public interest and broader self-regulation within the cards payments community benefits are more effectively industry. considered in Board decision-making.

16

contents IMPROVING AUSTRALIAN “Opening Up UK Payments” ICPACE PAYMENTS The UK Treasury issued a Discussion Paper APCA is a founding member of the proposing that “utility-style” regulation be International Council of Payment Association introduced, effectively sidelining self- Chief Executives (ICPACE). This peak body, regulation in UK payments. APCA pointed which includes payment associations from to the Australian experience, noting the Canada, Ireland, New Zealand, South Africa, benefits of robust self-regulation and the United Kingdom and the United States, need for a clear relationship between provides a valuable forum for information the industry self-regulator and the public sharing. The annual meeting of ICPACE Submissions regulator. organisations for 2013 was held in July in APCA frequently makes submissions to South Africa. Topics discussed included government departments and regulators, Local and international industry forums regulatory challenges post-GFC fall-out, seeking self-regulatory and market- Australian Payments Forum platform enhancements underway and based outcomes that are in the interests APCA supports the Australian Payments the need for strategic industry planning. of members and the public. This year, Forum (APF). First established in 2008, submissions were made to the RBA and the the APF brings together key payment International Liaison Commonwealth Consumer Affairs Advisory stakeholders including financial institutions, APCA frequently hosts international visitors Council (CCAAC), to ASIC and to the United merchants, schemes and industry and who are interested in Australian payments. Kingdom Treasury. consumer bodies. The APF fosters industry This year, we hosted a group of senior discussion and the identification of areas for officials from Payments and Clearing Regulating the excessive surcharging of card industry collaboration. Professor Ian Harper Association of China, Peoples transactions by merchants has been the Convenor of the APF since its and China Union Pay. The CCAAC was examining the regulation inception. of excessive surcharging by merchants APCA responded to queries about Australian through enabling the card schemes to The APF met in August 2012 to discuss the payments and hosted government and limit surcharges to the reasonable cost of RBA Innovation Review Conclusions and in industry visitors from India, Indonesia, acceptance. APCA accepted that excessive April 2013 to discuss the industry’s Real- Malaysia and South Korea, as well as NGOs surcharging by merchants warranted Time Payments Proposal. with an interest in financial inclusion such as the Bill and Melinda Gates Foundation. examination and that self-regulatory APCA Stakeholder Forum solutions were preferred over government APCA has many other stakeholders Stakeholder engagement regulation. However, the need to work including system users, service providers For APCA, engaging with non-member through the card schemes for a self- and technology providers. Many of these stakeholders is important. We seek regulatory solution identified the limitations stakeholders participate in the APCA stakeholder views, inform and brief them of the current regulatory regime. Stakeholder Forum (ASF), which meets on payments issues and seek public policy at least annually. Australia’s National Financial outcomes that are in the best interest of our Literacy Strategy In mid-2013, Paul Lahiff was appointed members and the public interest. A diagram ASIC was undertaking its review of as independent chair of the ASF, following of APCA’s activities is provided on the Australia’s National Financial Literacy the resignation of inaugural chair Ms Anne next page. Strategy. APCA’s response highlighted the Hurley. Mr Lahiff chaired his first ASF desirability of financial literacy to promote meeting on 29 July 2013 when participants inclusion in the digital economy and the met to discuss the New Payments Platform benefits of considering payments (as an Program. everyday interaction with the financial system) within financial literacy.

17

contents IMPROVING AUSTRALIAN PAYMENTS

Media releases

APCA Stakeholder CECS Forum Advisory Council

Industry forums

Statistics Website

Formal liaison Applications

Australian Payments Forum

Industry consultation Engagement for improving the payments system Submissions Proposals

Community Consumers and businesses Industry research White papers Payments stakeholders Vendors, suppliers, consumer representative bodies, merchants, government departments APCA publications Public consultation Payments system RBA, financial institutions, card schemes, industry associations, major retailers & service providers Regulators RBA, ASIC, ACCC, APRA, Treasury

18 Public awareness campaigns

contents Corporate Governance In this section, we provide the “information of record” for APCA in 2012–2013. • Board of Directors • Governance framework • Decision-making bodies • Our Team • Membership

19

contents CORPORATE GOVERNANCE

Board of Directors

There were a number of changes to the RUSSELL J RECHNER STUART A WOODWARD PAUL J APOLONY STEVE BARIC LINDSAY F BOULTON B EC (HONS), FCPA, FCIS BA (HONS), F FIN, GAICD F FIN, FIPA, MAICD (Non-executive director) BA (SOC. SC.), B EC (HONS), board during the year and up to September (Non-executive director) (Non-executive director) (Non-executive director) General Manager, Transaction GAICD (Non-executive Director) 2013. David Heine resigned from the board Chairman Deputy Chairman Deputy General Manager Payments and Products, in February 2013 and was replaced by – Operations, The Bank of Everyday Banking and Head of Banking, Mr Rechner has over 17 years General Manager, Tokyo Mitsubishi UFJ, Ltd Payments, National Australia Reserve Bank of Australia Adrian Lovney. The RBA appointed Lindsay bank experience with the Representation, Credit Bank Boulton to the board in June 2013. John Australia and New Zealand Cards, Payments and Retail Mr Apolony has over 31 Mr Boulton has over 30 years experience in central banking Murphy resigned from the board in August Banking Group Limited Strategy, , years experience in the Mr Baric has over 30 years and National Mutual Royal of banking industry including experience in financial covering economics, financial 2013 and was replaced by Steve Baric. Bank Limited. He retired as Australia roles in Operations, Product services working in markets, banking services, Director of Major Projects, Development and Strategy, commercial lending, cash and risk management. He Mr Woodward has over 35 The names and details of directors in office ANZ in 2002 and was specialising in Payments. management and transaction is a director of Note Printing years experience within the previously Senior General Mr Apolony was appointed banking. He is a director of Australia Ltd and the Reserve as at September 2013 follow. Commonwealth Bank Group, Manager, ANZ. Mr Rechner by the Other Banks Owner EFTPOS Access Australia Bank Health Society Ltd. including retail and corporate held senior management Member Electoral Group as a Ltd and alternate director Mr Boulton was appointed by banking, payment systems positions at Myer and Coles director in June 2007. of BPAY Pty Ltd. Mr Baric the Reserve Bank of Australia and merchant acquiring. He Myer prior to moving into the was appointed by National as a director in June 2013. is a director of BPAY Pty Ltd, Chairman of the High Value banking industry. He served Australia Bank as a director in Cardlink Services Ltd, Charge Clearing System Management Member of the Audit, Risk as Chair of the Trustee of August 2013. Committee. Member of the and Finance Committee and the ANZ Australian Staff Card Services Ltd, EFTPOS Audit, Risk and Finance the Remuneration Committee. Super Scheme for 12 years Access Australia Ltd and Member of the Consumer Committee, Remuneration ending March 2013 and eftpos Payments Australia Payments Committee and the Committee and Payments served as a member of the Limited and a Councillor Payments Policy Committee. Policy Committee. Code Compliance Monitoring on the Northern Committee immediately prior UnitingCare Ageing Council. to appointment as APCA Mr Woodward was appointed Chairman. Mr Rechner was by the Commonwealth Bank appointed a director and of Australia as a director in Chairman of the Company in February 2005. January 2008. Chairman and member of the Chairman of the Remuneration Payments Policy Committee. Committee. Chairman of the Fraud Committee and the COIN Management Committee.

20

contents CORPORATE GOVERNANCE

TIM F BUCKETT CHRIS G CAMPBELL CHRIS J HAMILTON PAUL A INGLIS DAVID C JAY ADRIAN LOVNEY B COM, CPA, MBA, GAICD B EC, M BUS (FINANCE), BA, LLM, AAICD B EC (HONS), MAICD B EC, MBA, FCPA, F FIN, LLB (HONS), MBA, AMP (Non-executive director) MAICD (Executive director) (Non-executive director) FAMI, MIIA, MAICD (Non-executive Director) (Non-executive director) Executive General Manager, (Non-executive director) Chief Executive Officer, APCA Head of Payments Industry, General Manager, Product & Customer Development, Head of Payments Policy and Australia and New Zealand Chief Executive Officer, Service, Cuscal Limited Mr Hamilton has 20 years Suncorp-Metway Limited Strategy, Group Banking Group Limited Australian Settlements Limited experience in financial Mr Lovney joined Cuscal Mr Buckett has over 19 Mr Campbell has over 22 services, particularly financial Mr Inglis has over 25 years Mr Jay has over 25 years in 1999 and is responsible years experience in financial years experience in banking markets infrastructure, experience in the banking experience in the banking for all product management services working in strategy, and economics, including and six years experience in industry in payments and industry with various ADIs and operational functions, marketing and product payments policy, finance, securities law. Mr Hamilton economics; and five years which has included roles in marketing, sales, and management. Mr Buckett product management, was appointed Chief Executive in government service, financial markets, internal customer service. Prior to was appointed by the Retail operational risk and related Officer and executive director including Federal Treasury. audit and retail banking. He this, he was General Manager, Banks Owner Member areas. He is a director and in January 2006. He is a director of EFTPOS is a director of the Australian Strategy & Communication, Electoral Group as a director chairman of EFTPOS Access Access Australia Limited Rugby League Referees where he was responsible Member of the Audit, Risk in February 2011. Australia Limited and a and a member of the global Association and alternate for leading the successful and Finance Committee, director of BPAY Pty Ltd and Payments Market Practice director of eftpos Payments migration and transition Remuneration Committee, Chairman of the Australian Cardlink Services Limited. Group and SWIFT Payments Australia Limited. Mr Jay was of Cuscal’s customers Payments Policy Committee Paper Clearing System Mr Campbell was appointed Maintenance Working Group. appointed by the Building to a new and innovative and Consumer Payments Management Committee. by Westpac Banking Mr Inglis was appointed Societies Owner Member payments platform. Before Committee. Member of the Payments Corporation as a director in by the Australia and New Electoral Group as a director 2008, Mr Lovney was the Policy Committee. April 2003. Zealand Banking Group in August 2010. Chief Executive of Abacus Limited as a director in July Australian Mutuals from 2006 Chairman of the Consumer Chairman and member of the 1998. to 2008. His background Audit, Risk and Finance Electronic Clearing System lies in policy development Committee. Member of Management Committee. Chairman of the Bulk and public affairs, and the Remuneration Committee, Chairman and member of Electronic Clearing System he has worked with the Payments Policy Committee and the Consumer Payments Management Committee. Queensland Treasury, ATO Governance Sub-Committee. Committee and the Payments Member of the Audit, Risk and Queensland Department Policy Committee. and Finance Committee, of Premier and Cabinet. He Remuneration Committee, was appointed by the Credit Consumer Payments Unions Owner Member Committee, Payments Policy Electoral Group as a director Committee, Consumer in February 2013. Electronic Clearing System Management Committee, Member of the Payments High Value Clearing System Policy Committee and Management Committee, Consumer Payments COIN Management Committee. Committee and Governance 21 Sub-Committee. contents CORPORATE GOVERNANCE

Governance framework

The board of directors Management committees and administrative policies, monitor various risk Risk management The board, comprising an independent In accordance with the company’s constitution, exposures and statutory compliance matters, APCA has a well-defined risk management chairman, the chief executive officer and non- the board has established a management and review the company’s budget and monitor framework which is overseen by the board. Key executive directors appointed by the company’s committee for each of the company’s five clearing expenditure against it. risks are regularly reviewed and APCA’s risk owner members, is responsible for setting the systems and its infrastructure system (COIN). appetite is accessed annually. During 2013, The Remuneration Committee comprises the company’s strategic direction and corporate Acting under delegated authority from the board, APCA engaged Lawler Partners on a three-year chairman and the members of the Audit, Risk governance. management committees are responsible for contract to provide internal audit services, which and Finance Committee. Its responsibilities the efficient operation and management of each has further enhanced APCA’s internal control The chairman is a non-voting director and holds are to establish remuneration policies and clearing system. environment. office for two years from the date of appointment. practices for the company generally and to The term of the current chairman, Russell J Board and management recommend remuneration levels and contractual Rechner, ends on 31 December 2013. committee self-assessment arrangements for the CEO. The CEO is a board-appointed, non-voting, Directors, management committee members and Code of Conduct executive director. The CEO manages the the internal management team participate in an All directors, management committee members company’s affairs under the broad guidance annual self-assessment process. This process and senior executive staff must comply with of the board. The CEO’s performance against is conducted through anonymous surveys and a Directors’ and Officers’ Code of Conduct. agreed goals is assessed on an annual basis by designed to identify areas for improvements in The Code was developed using a model from the board. performance. the Australian Institute of Company Directors. Reserve Bank of Australia Other board committees Directors and management committee members (RBA) liaison arrangements The board is empowered to establish other review adherence to the Code annually. Senior staff of the RBA and APCA consult on committees as it sees fit to assist in managing a regular basis on issues of industry policy. the company’s affairs including the Audit, Risk Ethics, policies and procedures The RBA has automatic rights to appoint and Finance Committee and the Remuneration APCA promotes adherence to best practice representatives to the board of directors and Committee for good corporate governance, and a high professional and ethical standard. management committees. In June 2013, the RBA the Payments Policy Committee and the Fraud A framework of management policies covers chose to rejoin the board. Committee. human resources, technology, external matters, finance and general management. It is reviewed The Audit, Risk and Finance Committee’s primary by the Audit, Risk and Finance Committee and functions are to review the company’s internal supported by management procedures that cover financial practices and audit results, monitor the detailed implementation. effectiveness of the company’s financial controls 22

contents CORPORATE GOVERNANCE

Decision-making bodies

APCA maintains a transparent decision- BOARD OF DIRECTORS making structure designed to ensure member oversight at multiple levels. The board is the top-level decision-making venue, supported by management committees, technical Australian Payments Policy Audit, Risk & committees, working groups and advisory Payments Committee Finance Committee Forum bodies. Remuneration Committee

APCS BECS CECS HVCS ACDES COIN Fraud Management Management Management Management Management Management Committee Committee Committee Committee Committee Committee Committee

APCS APCA CECS CECS Evaluation CECS Standards CECS Capacity Printing Standards Stakeholder Advisory Council Review Sub-Committee Planning Sub-Committee Forum Sub-Committee Sub-Committee

CECS Technical CECS Technical Message Formats Security Working Group Working Group

23

contents CORPORATE GOVERNANCE

Our Team

Our organisational structure reflects APCA’s As at September 2013 BOARD & MEMBERS unique role and purpose as the payments industry’s self-regulatory body. Our key activities are divided into six business units, Executive Communications CHIEF EXECUTIVE OFFICER Assistant Ida Turner Chris Hamilton each with clear goals and responsibilities: Lesley Terry • Industry Change Management: oversees payments industry projects that introduce change and evolve Web Australia’s payments environment. Administration • Industry Policy: leads industry policy development Jeremy Bojman and advocacy activities to improve Australia’s payments system and to enhance the value of members’ payments related activities. • Self-Regulation: is responsible for development and TECHNOLOGY INDUSTRY CHANGE INDUSTRY POLICY SELF-REGULATION FRAUD & SECURITY FINANCE & RISK & OPERATIONS MANAGEMENT Brad Pragnell Susan Bray Caroline Pearce Rodney Clark operation of payments system and self-regulation, Bob Masina Michael Forey APCA’s broad constituency and legal advice. • Technology and Operations: provides critical support Technology Projects Industry Policy Legal Fraud & Security Reception Gavin Bollard Rob Magee Arun Kendall Vanessa Chapman Paul Creswick Anastasia Fengaros for industry-wide activities including operation and Shirley Young Shannon Lewis Trish McGinness maintenance of databases, statistics collections Operations Robin Trulock Membership Lynda Gajic & Governance and website developments. The team also provides Angelina Maurice Rob Cirotto internal support to staff. Louise Lonergan Tanya Davey Elizabeth Fox • Fraud and Security: is responsible for developing System Development Kim Gillen APCA’s role in combating fraud, for reducing risk Tony Giang Kellie Oastler and ensuring technical compliance across the Information payments systems. Rhonda Hunter • Finance and Risk: oversees the finance and reporting Statistical analysis Petter Ingemarsson function as well as assesses, manages and monitors APCA’s risk exposures.

24

contents CORPORATE GOVERNANCE

Membership

APCA has five categories of members: owner OWNER MEMBERS OWNER MEMBERS CLEARING SYSTEM MEMBERS members, clearing system members, infrastructure AMP Bank Limited Standard Chartered Bank Delphi Bank (a division of Bendigo and Adelaide Bank system (COIN), advisory and associate members. Limited) Australia Limited State Street Bank and Trust Company Details of the membership categories are available ECU Australia Limited Australia and New Zealand Banking Suncorp-Metway Limited • on the APCA website. Group Limited • Gateway Credit Union Limited The Bank of Tokyo-Mitsubishi UFJ, Ltd As at September 2013, APCA had 92 members who Australian Settlements Limited (ASL) Greater Building Society Ltd The Hong Kong and Shanghai Banking Corporation directly participate in the five clearing systems (owner Bank of America, National Association Limited (Australia Branch) Limited Hume Building Society Ltd and clearing system members) and 14 COIN members. Bank of China Limited United Overseas Bank Limited Hunter United Employees’ Credit Union Limited Limited Westpac Banking Corporation • IMB Ltd Barclays Bank plc Industrial and of China Limited Bendigo and Adelaide Bank Limited CLEARING SYSTEM MEMBERS ING Bank NV (Sydney Branch) Cashcard Australia Limited Australian Defence Credit Union Limited Bank (Australia) Limited Citigroup Pty Limited B & E Ltd Lifeplan Australia Building Society Limited Commonwealth Bank of Australia • Bananacoast Community Credit Union Ltd Lloyds TSB Bank plc, Australia Branch Cuscal Limited • Bank of China (Australia) Limited Maitland Mutual Building Society Limited Deutsche Bank AG Bank of Communications Co., Ltd Sydney Branch mecu Limited HSBC Limited Bank of Scotland plc, Australia Branch Mega International Commercial Bank Co., Ltd Bank of Sydney Ltd Indue Ltd Members Equity Bank Pty Limited BankVic ING Bank (Australia) Limited Newcastle Permanent Building Society Ltd (a division of Commonwealth Bank of JP Morgan Chase Bank, National Association Australia) Police Bank Limited Macquarie Bank Limited BNP Paribas QT Mutual Bank Ltd Mizuho Bank, Ltd BNP Paribas Securities Services Queensland Police Credit Union Limited Limited • CLS Bank International Queensland Professional Credit Union Limited Oversea-Chinese Banking Corporation Limited Coles Group Limited • Queenslanders Credit Union Limited Reserve Bank of Australia • Community First Credit Union Limited Australia Limited

Royal Bank of Canada Community Mutual Ltd Credit Union Australia Limited 25

contents CORPORATE GOVERNANCE

Glossary

CLEARING SYSTEM MEMBERS COIN MEMBERS ACCC Australian Competition & Consumer Commission Rabobank, Australia Branch (Coöperatieve Centrale Cardlink Services Limited ACDES Australian Cash and Distribution Exchange System Raiffeisen-Boerenleenbank B.A.) eftpos Payments Australia Limited ADIs Authorised Deposit-taking Institutions Railways Credit Union Limited First Data Resources Australia Limited APCS Australian Paper Clearing System Select Credit Union Limited Strategic Payments Services Pty Ltd APRA Australian Prudential Regulation Authority SGE Credit Union Limited Unisys Credit Services Pty Limited ASIC Australian Securities and Investments Commission Southern Cross Credit Union Limited ATM Automatic Teller Machine State Bank of India • Also a Coin Member BECS Bulk Electronic Clearing System Sumitomo Mitsui Banking Corporation, Sydney Branch BPAY see www.bpay.com.au Summerland Credit Union Limited CECS Consumer Electronic Clearing System Taiwan Business Bank, Sydney Branch COIN Community of Interest Network Limited Direct Entry Payments system for direct debits and direct credits The Capricornian Ltd eftpos Domestic debit card system The Rock Building Society Limited GDP Gross domestic product The Royal Bank of Scotland N.V., (Australia) Branch HVCS High Value Clearing System The Royal Bank of Scotland, plc Australia Branch ISO International Organization for Standardization Tyro Payments Limited • NGOs Non-government organisations UBS AG (Australia Branch) PCI Payment Card Industry Uniting PIN Personal Identification Number Victoria Teachers Mutual Bank POS Point-of-sale Warwick Credit Union Ltd PSB Payments System Board Wide Bay Australia Ltd RBA Reserve Bank of Australia Woolworths Limited SWIFT Society for Worldwide Interbank Financial Telecommunications

26

contents Australian Payments Clearing Association Limited ABN 12 055 136 519 Registered Office Level 6 14 Martin Place Sydney NSW 2000 Telephone: +61 2 9221 8944 Email: [email protected] www.apca.com.au GPO Box 4893 Sydney NSW 2001 Solicitors Gilbert + Tobin, Sydney Auditors Deloitte, Sydney

contents