What is the Australian Payments Network?

The digital payments market in Australia has been growing steadily since the turn of the century, but it was kicked into overdrive by the pandemic. The total transaction value in the sector is set to reach over $100 billion in 2023 and $179 billion by 2027, markedly overtaking traditional payments in the process.

However, digital payments bring with them their own risks. Not only do digital payments have the potential to fail due to software and hardware errors, but they are open to fraud from nefarious entities. Tackling this fraud is an increasingly high priority for the industry, and the Australian Payments Network has never been more vital.

The Australian Payments Network (AusPayNet) is a self-regulatory body that exists to oversee Australian payment systems. It was first set up in 1992 and has over 140 members including most of the country’s leading financial institutions. The APN oversees around 98% of non-cash payments and works collaboratively with Australian law enforcement to combat payment fraud.

If you wish to navigate AusPayNet successfully, you need to first understand how it functions.

How the Australian Payment Network works

The APN is composed of an individual payments system, the organisation that uses it and the infrastructures that support that system. It operates at a retail and wholesale level, with retail covering individual consumers and businesses, and wholesale covering financial market transactions. There are more of the former and less of the latter, though wholesale payments are generally of a much higher value.

All non-cash payments made and received by member entities must be arranged through the APN. First, a payment is made and then a payment message is sent to all parties. If both the sender and receiver use the same bank, the process is relatively straightforward, whereas if both use different banks, the APN ensures they are both using the same standards and practices.

Twice a year, the APN also collects statistics on fraud from all its member institutions and then publishes an aggregate of these findings alongside an annual Australian Payments Fraud report. This gives further details on how the body and the industry in general are working alongside the authorities to cut down on fraud.

What payment systems does AusPayNet cover?

As well as managing 98% of non-cash payments in Australia, the APN also develops the rules, regulations and standards that govern the sector. These decisions are made in collaboration not only with the authorities but also with the financial institutions, payment service providers and tech companies that make up APN membership.

The rules and regulations of the APN cover everything from cards and cheques to direct debits, ATM withdrawals, EFTPOS transactions and high-value payments made between financial institutions. It also covers the Community of Interest Network (COIN) which is a network for secure transmissions.

Debit and credit cards are currently the most common method of payment in Australia, with cheques now accounting for less than 2% of all non-cash payments. Arguably the easiest and most reliable way to make and receive payments is via direct debit or direct bank transfer, and these payments are also covered. Essentially, any form of payment made without physical cash is covered by the APN.

There are three APN membership categories:

Participants – members participating directly in the payments system, such as banks and other financial institutions as well as retailers and payments service providers.

Operators – commercial operators of payment systems such as technology companies and commercial operators.

Affiliates – suppliers of goods and services to card issuers, including providers of ATMs and POS terminals as well as card processing businesses.

What are the objectives of the Australian Payment Network?

There are three main objectives outlined by the APN, with the overall objective being to improve non-cash payments in the Australian system.

Enabling competition and innovation

This is achieved by ensuring all payment providers and financial institutions have access to the tools they need to provide a service that meets and in some cases exceeds expectations. All members are given access to a guide that informs members how to participate in the system and how to keep up with recent technological advances. It also publishes regular reports and insights that members can use to create new innovations and remain competitive.

Controlling risk 

Preventing fraud is one of the cornerstone concerns of the APN, and it does this through initiatives such as the CNP (card-not-present) Fraud Mitigation Framework. These are initiatives created in collaboration with APN members to reduce online card fraud. The APN also sets the contactless PIN limit, which was increased from $100 to $200 over the pandemic.

Promoting efficiency

The APN works to create more accessible, reliable and efficient payments among its more than 150 members. They achieve this by conducting regular public consultations, undertaking research and consulting with stakeholders. They also make regular submissions to regulators and the Australian government to help solve issues impacting the system.

How can GoCardless help?

GoCardless helps you automate payment collection regardless of your global payment preferences, cutting down on the amount of admin your team needs to deal with when chasing invoices. It is also a proud member of the Australian Payments Network, so you can be assured of a service that meets all national standards.

Find out how GoCardless can help you with ad hoc payments or recurring payments.