, and digital identity is likely to reduce the scope for identity fraud, while providing convenient authentication, as part of an open banking regime. a strong digital identity system would also open up new areas of digital commerce and help reduce online payments fraud. it will also help build trust in a wide range of online interactions. building this trust is increasingly important as people spend more of their time and money online. so we would like to see some concrete solutions developed and adopted here. cross - border retail payments a third area where we would like to see more progress is on reducing the cost of cross - border payments. for many people, the costs here are still too high and the payments are still too hard to make. it is important that we address this. it is an issue not just for australians, but for our neighbours as well. i recently chaired a meeting of the governors from the south pacific central banks, where i heard first - hand about the problems caused by the high cost of cross - border payments. analysis by the world bank indicates that the price of sending money from australia has been consistently higher than the average price across the g20 countries ( graph 5 ). and a recent accc inquiry found that prices for cross - border retail payment services are opaque. customers are not always aware of how the ‘ retail ’ exchange rate they are being quoted compares with the wholesale exchange rate they see on the news, or of the final amount that will be received in foreign currency. [ 2 ] there are also sometimes add - on fees. https : / / www. rba. gov. au / speeches / 2019 / sp - gov - 2019 - 12 - 10. html 7 / 12 10 / 12 / 2019 a payments system for the digital economy | speeches | rba graph 5 as part of the rba's monitoring of the marketplace, our staff recently conducted a form of online shadow shopping exercise, exploring the pricing of international money transfer services by both banks and some of the new non - bank digital money transfer operators ( mtos ). this exercise showed that there is a very wide range of prices across providers and highlighted the importance of shopping around. the main results are summarised in this graph ( graph 6 ). in nearly every case, the major banks are more expensive than the digital mtos. for the major banks, the average mark - up over the wholesale exchange rate is around 5½ per cent, versus about 1 per cent for the digital mtos. https : / / www

another element of the roadmap that has the potential to promote the digital economy is the development of npp message standards for payroll, tax, superannuation and e - invoicing payments. the standards will define the specific data elements that must be included with these payment types, which will support automation and straight - through processing. we would expect financial institutions to be competing with each other to enable their customers to make and receive these data - rich payments. less positively, there is still uncertainty about the future of the two remaining services that were expected to be part of the initial suite of osko overlay services. these are the ‘ request - to - pay ’ and ‘ payment with document ’ services. we understand there are still challenges in securing committed project funding and priority from npp participants to move ahead, even though bpay has indicated it is ready to complete the rollout. the rba strongly supports the development of these additional npp capabilities, which are likely to deliver significant value for businesses and the broader community. digital identity a second area where the payments system board would like to see further progress is the provision of portable digital identity services that allow australians to securely prove who they are in the digital https : / / www. rba. gov. au / speeches / 2019 / sp - gov - 2019 - 12 - 10. html 6 / 12 10 / 12 / 2019 a payments system for the digital economy | speeches | rba environment. today, our digital identity system is fragmented and siloed, which has resulted in a proliferation of identity credentials and passwords. this gives rise to security vulnerabilities and creates significant inconvenience and inefficiencies, which can undermine development of the digital economy. these generate compliance risks and other costs for financial institutions, so it is strongly in their interests to make progress here. it is fair to say that a number of other countries are well ahead of us in this area. the australian payments council has recognised the importance of this issue and has developed the ‘ trustid ’ framework. the government's digital transformation agency has also been working on a complementary framework ( the trusted digital identity framework ), which specifies how digital identity services will be used to access online government services. the challenge now is to build on these frameworks and develop a strong digital identity ecosystem in australia with competing but interoperable digital identity services. the rollout of open banking and the consumer data right should bring additional competition among financial services providers