Australian Banks Respond to Cryptocurrency CompetitionI always guessed this was coming, but I'm surprised to see them move so fast. I've always seen banks as the slowest industry to change in response to a shifting market. But it appears that Australian Banks are moving to a defensive position by thwarting bitcoin purchases, and preparing to compete by introducing a fast and user-friendly, inter-bank transaction system.
This article in the Sydney Morning Herald draws together a number of stories that show how the big four banks of Australia are freezing accounts and blocking transactions where they detect activity involving bitcoin exchanges.
http://www.smh.com.au/business/bitcoin-tensions-rise-as-investors-claim-banks-freezing-their-accounts-20171229-p4yy3z.htmlIt seems like the obvious solution; if you don't want cryptocurrency to be successful, block customers from exercising their right to purchase it. The trouble is that there are now so many different options for transferring money that, while it can certainly slow down a lot of the business, it won't stop it. And where money is there for the making in the exchange between cryptocurrency and fiat currency, someone will always find a way to make it work.
But I believe their other strategy will have a more significant effect on cryptocurrency adoption. "Provide the services that the public want, at a good price." This is a tried and tested strategy that the big four banks have never needed to turn to. In their monopoly, they've been able to provide very poor quality service for fees far above the cost of delivering it. But cryptocurrency has provided competition by enabling people to quickly transfer value to each other via the Internet, for (until recently with bitcoin) significantly lower costs.
So now they are introducing a new protocol, NPP (
New Payments Platform) to enable immediate payments between nearly all Australian bank account holders. BPay Group is also adding functionality with an extra layer called Osko. This will then enable the payments to be made using the recipient's mobile number or email address. The new protocol enables transactions to also contain additional text information and links to external documents. This will give Australians the ability to do one of the main things that makes cryptocurrency attractive, simple fast electronic payments to each other.
To be fair, this project was
first discussed in 2012, long before bitcoin's rise to general public awareness. But it was also a long time after Satoshi Nakamoto put the writing on the wall. And while this leap in banking services might seem localised to Australia, the task of writing the code was given to SWIFT.
"NPP Australia also signed a 12-year contract with global provider of secure financial messaging services Society for Worldwide Interbank Financial Telecommunication (SWIFT) to design, build and operate the basic infrastructure. This organisation is the powerhouse behind international banking transfers and owner of the SWIFT keys you need to make them. So while I don't know what IP arrangements were made for this project, it is easy to see how an agreement could easily be reached to role out this service at an international level. Doing so would be like handing out the Paypal.me service to everyone without them having to incur the extra fees charged by Paypal for using it. When it comes to providing a useful alternative to cryptocurrency, this could be a game changer. Though, so far as I have searched, there has been no indication of proposed fee structures for using Osko on the NPP.
http://www.apca.com.au/about-payments/future-of-payments/new-payments-platform-phases-3-4The article about this failed to breakdown the NPP acronym.
http://www.smh.com.au/business/banking-and-finance/cash-payment-decline-tipped-to-gather-pace-in-2018-20171222-p4yy03.html
