When it comes to innovative payment technologies, banks have got quite a lot of catching up to do, according to Harold Dimpel, CEO of mobile payment technology company mHITs Limited.
Speaking at a recent Australian Interactive Media Industry Association (AIMIA) event in Sydney, Dimpel said that Australian banks are “a bit reluctant” to do a lot of innovation.
“One thing that is still a problem is the non-'realtimeness' of information exchange,” he said.
“In terms of this realtime switching of information there has not been a lot of change. So most of you have probably had the problem where you tried to pay someone and the money didn’t turn up in their bank account for so many days and so on.”
He said that even though there are legitimate reasons to why banks may not be able to easily provide this service to customers we still “need to move to an environment where that can be done where [consumers] can move money from one institute to another [in realtime]”.
He added that as much as the credit providers such as MasterCard and Visa and other third parties involved in payment technologies are willing to provide innovative ways for consumers to make payments, the switching of money when making transactions still primarily depends on the banks’ payment systems.
“Why haven’t we seen many changes in payment [technology] fundamentally? Most of it is because most of the enabling technologies still rely on legacy bank payment architecture, which certainly can hold back a lot of things,” Dimpel said.
“The money is ultimately in the bank account somewhere, but the banks pretty much control how you will use it. If they don’t agree to something then they won’t support it.
“In Australia, we’ve got the banking system and BPAY, we’ve got EFTPOS and we’ve got MasterCard and Visa… if the banks didn’t support any of those in this country then we wouldn’t have them.
“If they don’t support ideas then they don’t get out”
However, Dimpel said that what Australian banks’ lack in innovation, they make up for in stability. He said compared to other countries, Australian banks have “a lot of stability but not a lot of innovation”.
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