Central Bank governor Philip Lowe has called on the Australian Payments Council to bring financial institutions together if the nation is to catch up with countries already moving towards cashless payment systems.
Mr Lowe said the Reserve Bank of Australia would need to take regulatory action if the relevant bodies and companies aren't able to coordinate efforts to increase the safety and functionality of an electronic economy.
"We need everyone to get around the table and say there's something we need to do in the national interest," Mr Lowe said at the Australian Payment Summit in Sydney on Monday.
Read Next Without the coordination of the institutions, he says Australia will fall further behind a number of European countries and limit the potential technology can develop new payment options, he said.
"Everything is moving electronic, so maintaining the integrity of the identity system in the electronic world is incredibly important," Mr Lowe said.
"To get the benefits of open data we need a very strong electronic digital identity system."
Australians have nearly halved the number of times they go to an ATM, falling on average from 40 times a year to about 25 since the turn of the decade, according to data compiled by the Australian Bureau of Statistics and the RBA.
Meanwhile, the number of electronic transactions per person has increased from about 100 per year from around the turn of the century, to nearly 500 as at June.
Mr Lowe said it was not yet appropriate to remove physical cash from the system and simply rely on electronic bank notes.
But he admits a point has been reached where electronic transactions are ubiquitous and its safety and affordability needs to be addressed.
"This shift (towards a near-cashless system) is a positive development that should promote our collective welfare," he said.
"People need to have confidence that the electronic payment system will be operating when they want to make their payments and that it will deliver the payment services that they need."
Mr Lowe said the RBA met with the Australian Payments Council earlier in the year and emphasised the need for institutions to compromise on their particular model in the national interest.
Fraud is another issue for the development of an electronic economy as growth in e-commerce activity has provided new opportunities for would-be fraudsters, Mr Lowe said.
Card-not-present fraud rose by 15 per cent in 2017 and now represents 87 per cent of total scheme card fraud losses, while industry has had successes in addressing card-present fraud with the introduction of chip technology and the switch to PINs.
"If fraud in the system keeps rising, then people won't want to use electronic payment methods, they'll think they may as well use cash instead," Mr Lowe told the summit.
