##ing and interchange have formed part of a broader package that also included rules relating to access and transparency. i don ’ t have time to cover all of that today. but taken together, the effects have been beneficial. the system has continued to innovate, and merchants ’ card payment costs have fallen. 3 it is also notable that these costs are significantly lower in australia than in a jurisdiction like the united states, where reforms to card systems have been much more limited. 4 the murray report last year broadly endorsed the psb ’ s reform approach while flagging a number of areas for further consideration, particularly in relation to surcharging and interchange. these have now been taken up as part of the psb ’ s card payments review. the issue of surcharging remains contentious. instances of apparently excessive surcharging have persisted. while they acknowledge arguments for what might be called a “ no excessive surcharge ” regime, the schemes have argued that the current formulation is too complicated and difficult for them to enforce. the card payments review is looking at several possible mechanisms for addressing this. one option proposed by murray is a tiered approach that would allow tougher surcharging constraints to be placed on low - cost cards. a number of other options are available to strengthen enforcement and disclosure practices, for example allowing schemes to cap surcharges that are not percentage based at some low fixed amount. on interchange fee regulation there are a number of issues to consider. these include the overall level of the interchange cap, the complexity and proliferation of interchange categories, the phenomenon of interchange “ drift ” with the three - year compliance cycle, and the wide disparity between interchange rates for preferred merchants and those applying to others. while it broadly endorsed the psb ’ s regulatory approach to date, the murray report recommended that consideration be given to tightening existing interchange regulations in some significant respects. these included lowering the overall interchange cap, and broadening its coverage to include other incentive payments that serve a similar function. it argued that this would help to prevent circumvention and, in the case of companion card arrangements, would improve competitive neutrality. all of these things are now being carefully considered. as i said at the outset, the review process is still underway and i won ’ t pre - empt any possible conclusions. reserve bank staff have already consulted extensively with interested parties, and i expect there will be more of that to come in response to the submissions received. i take

difficult to achieve at the level of the system as a whole, because the available incentives do not necessarily support coordinated action. consistent with the wallis vision, the psb has been active in promoting coordinated industry solutions where that was in the public interest. an early example was in encouraging faster cheque clearing – an obvious improvement in system efficiency but one that couldn ’ t have been achieved without effective coordination. on a larger scale, the psb more recently undertook its strategic review of innovation in the payments system, the results of which were published in 2012. 2 that review was conducted over a two year period and involved extensive consultations with both the payments industry and with users of payments services. it found a number of areas where there was scope for system improvements that could be achieved through coordinated action. the key areas were : • same - day settlement of direct entry transactions ; • faster payments and out - of - hours payments to be made generally available ; • capacity for richer information with payments ; and • an easy addressing solution for electronic payments. the first one of these was delivered at the end of 2013 and essentially involved an acceleration of existing direct entry processes. the remaining three form a more ambitious agenda and are together being taken up as part of the industry ’ s new payments platform ( the npp project ). the npp is a successful example of what can be done through collaboration between the industry and its regulator. it is also a good example of the catalyst role for the psb in promoting system innovation that was envisaged by wallis. while it is an industry - led project, it is strongly supported by the psb, and the board continues to encourage commitment to the project and to its timely completion. the project was launched in early 2013 and is now well advanced. on current scheduling the npp will deliver a fast payments service with rich information and addressing capabilities in the second half of 2017. it will be linked to a fast settlement service provided by the reserve bank, which will allow transactions to be cleared and settled 24 / 7 in close to real time. all of this will amount to a world - class payments infrastructure. it will also be a platform for further innovation. one of the key decisions made at an early stage of the project was to separate the basic clearing and settlement infrastructure from the commercially based overlay services that would use it. the industry is committed to an initial overlay that is intended to provide an attractive service and drive early volume growth. but it is important to note that access