The Reserve Bank says it's working with the banking industry to innovate the way Australians pay for things as old-fashioned cheques fall by the wayside.
RBA governor Glenn Stevens says the New Payments Platform will help Australia catch up with other countries to deliver real-time, accessible payments to the community.
Speaking in Sydney on Thursday, the governor said countries such as Sweden, Singapore, Mexico, South Africa and India had already made the leap to fast retail payments.
"Is there a plausible reason to accept Australia falling behind?" he asked.
Mr Stevens said the payments system had seen rapid innovation, with Australia leading the world when it comes to contactless payment (eg. PayPass, PayWave).
An RBA survey found cash remained the most frequently used means of payment in 2013, though its use had declined in recent years, while the use of cheques had been declining since its peak in 1995.
"Since then, the number of cheques written each year per capita has fallen by more than 80 per cent (from 45 to eight)," Mr Stevens said.
"Over the same period, the number of electronic payments per capita has risen by more than 400 per cent."
Mr Stevens urged the industry to deliver on its commitment to deliver real-time, accessible payments, despite it being a complex and costly project, and to resist the temptation to maintain the status quo.
Innovation would lead to further growth in electronic payments, reducing costs for banks and maintaining their relevance, he said.
If Australian banks don't step up and offer these services, others will, he said.
"We - the industry and the Reserve Bank itself - are building a piece of national infrastructure," Mr Stevens said.
"We should take every opportunity to increase its potential value to the nation, rather than limiting it for fear of where it might take us.
"The biggest risk with this project is probably not a technical one. It is the risk that, in 10 or 15 years time, we will look back and see that we missed an important opportunity to provide something that will fully and efficiently support the payments needs of our economy."
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