Australian Banking Must Catch Up with the Rest of the World

The Reserve Bank of Australia (RBA) says that banks are "dragging their feet" trying to hold on to old ways of running payments by card. Banks need to catch up with the rest of the world. Instead of installing new systems they are concentrating on making more money. If they do not act soon the RBA will intervene and use its regulatory powers.

The existing system is costly for the consumer and business to use. Even though computerization has been adopted the actual methods used are over 3o years old in some cases. The RBA had to force banks to make their charges known when giving them the right to set their own rates for ATM usage. Furthermore, charges for interchange of funds paid by credit card to businesses had to be capped.

The problem is that the RBA is only a "watchdog". Other countries have bodies that run the private sector banking system. Coalition Governments have made the market too free. Every corporation is doing its own thing. A Labor Government should intervene to force modernization. Failing this the RBA can regulate and make companies change to a new system. Freezing out competition in EFTPOs transactions, for example, cannot be tolerated.