Mobile phone numbers and email addresses will replace bank account numbers and money will be transferred near-instantly between institutions as part of what the Reserve Bank is calling its new payments platform, unveiled by incoming governor Philip Lowe to a parliamentary committee on Thursday.
Although a joint project with the banks, the central database will be managed by the Reserve Bank and will replace systems that date back to the days of programming by punch cards.
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"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," Dr Lowe said on Thursday.
"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."
"We will also be able to send a lot more information with the payments. You will no longer be restricted to just sending 14 characters if you go onto your internet bank to make a payment."
Dr Lowe said the origin of the 14-character rule was a limitation of the amount of information that could be fitted on to 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."
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