Prior to the establishment of APCA payments clearing had been managed through a variety of formal and informal agreements between participating financial institutions. The establishment of APCA was indicative of the growing recognition of the importance of payments clearing to the operation of the Australian financial system. Payments clearing is the exchange of payment instructions for value between providers of payment services.
Clearing is at the core of the payments system.
Clearers provide the means for individuals and businesses to transfer value, one to the other, regardless of where particular accounts are held. Clearers accept throughout each day open-ended obligations drawn on like institutions, as a matter of course. A high level of mutual confidence is needed between clearers for the payments system to operate effectively. Institutions, quite simply, would be unwilling to accept open-ended obligations drawn on institutions in which they did not have a very high degree of confidence. Without this mutual confidence between clearers the payments system could not operate effectively.