Incoming governor of Australia’s Reserve Bank, Philip Lowe, told a parliamentary committee earlier this week that mobile phone numbers and internet addresses will replace bank account numbers in the near future, and money will be able to be transmitted near instantly thanks to the bank’s new payments platform. Undertaken jointly with private banks, the Reserve Bank will manage the central database.
“When this work is finished, we will be able to make instantaneous payments to one another, with the money transferring between our accounts in a matter of seconds — and that is regardless of who we bank with,” Lowe said on Thursday (Sept. 22). “You can think of it as a central database that might have your phone number in it and a link to your account. You can change that link if you subsequently want to change where your money is going to. It may well make the whole issue of BSBs and account numbers less important.”
Lowe further noted that payments will be able to come embedded with more information than had been the case previously, as it would no longer be restricted to just sending the 14 characters of an account number. Lowe said the account numbering system used today exists purely because 14 characters was the amount of information that could fit onto the punch cards used in computing in the 1980s.
“Our payment system in 2016 is still being constrained by punch cards. It has been a major problem, and we have decided, with the industry, to do something about that. It will help competition, but it will also deliver actual value to consumers. You and I could sit here and make a payment to one another, and it would be across our banks’ accounts in 10 seconds. So, these delays people experience in moving money between banks — and it can take a day or two or, in the old days, much more than that — are all going to go.”