could also facilitate more competition from overseas providers of payment related services. a mandate from the reserve bank that eftpos message formats must be able to support credit transactions might likewise lay the foundation for innovation in the eftpos system based on these transactions more quickly than the industry might be able to achieve by itself. notwithstanding its regulations with respect to card payment systems, the reserve bank has in the past preferred the first two of the above options. this is particularly the case with respect to issues relating to technical standards and system architecture, where the reserve bank has on occasion raised the issues but left the industry to drive reforms. we remain conscious of the risks that public intervention itself may be an impediment to innovation. as we have said a number of times, our hope is that the industry will deal with these issues itself. but we also know that if the industry fails to push ahead with improvements to the system, australians will be denied the full benefits of a modern retail payments system. to a large extent, the future approach of the payments system board depends on the behaviour of industry participants. if industry agreement on further reforms can be reached relatively quickly, then the need for the reserve bank ’ s co - ordinating role to be interventionist is limited. on the other hand, if, as on some past occasions, the industry is unable to carry forward reform and innovation by itself, the reserve bank would consider making more extensive use of the tools at its disposal. “ faster payments ” is a system to allow internet banking payments to be made in close to real time. conclusion the economics of networks are complex, and the role of public policy is a delicate one. the aim is to ensure, as far as we can, that the correct balance is struck between the need for cooperation and the benefits of competition. co - operation is required in order to ensure that the benefits of an extensive, and reasonably standardised, network can be enjoyed by the public, raising economic welfare. competition is vital in the long run to make sure that costs are minimised and the incentive to respond to changing consumer preferences maximised. policy has to recognise and fulfil its role in dealing with the externalities inherent in the set of decisions made by private market participants, while also respecting and maintaining the competitive dynamic. we recognise that the roles of the industry participants and the regulator are mutually interdependent. we trust that the industry does too. the payments system board is content to confine itself

to encouraging industry solutions and being the occasional catalyst for agreement among the parties, where that achieves the goals the board has been given. but it is and must be also prepared, if needed, to use regulatory powers more forcefully. in judging which approach is preferred, we will respond to the industry ’ s behaviour, just as they respond to ours. the approach we adopt in any instance has to be tailored to the circumstances and we will ourselves on occasion need to innovate. what will be constant is the set of statutory goals given to the payments system board – controlling risk, and promoting competition and efficiency in the payments system. the payments system board is committed to those objectives and will be pragmatic, but determined, in pursuing them. we look forward to effective engagement with the industry in the process.