APCA’s clearing systems provide an integrated body of rules and decision-making structures for the efficient clearing and settling of payments between APCA members. These rules are a combination of membership requirements, processing regulations and procedures and minimum standards for processing and technology.

Each clearing system is designed and administered to meet two broad industry objectives: efficiency, so that large volumes of payments can be handled across multiple parties cheaply and with minimum risk; and security, so as to protect processes, data and value from unauthorised interference. Each system also needs to provide the platform for adaptation and innovation by the competitors in the product markets served by the system.

The five clearing systems APCA currently administers, and the payment flows they support, are described under Australian Payments.

APCA’s clearing systems are continuously evolving in response to market developments. We summarise the main operational developments below.

• To further strengthen data security within APCS and BECS, all bilateral links within these systems were upgraded to tripleDES line encryption by June 2008.

• Amendments were drafted to the BECS Procedures to ensure financial institutions adhere to the time frames set out in the account switching facilitation package for assisting consumers to re-establish their direct debit and credit arrangements.

• Woolworths Limited became the fourth non-financial institution member of CECS in November 2007, bringing a further retailer perspective to the decision-making processes for the EFTPOS system.

• Business rules and technical requirements have been established for four types of “credit EFTPOS” deposit transactions, so that one-off payments can be made to proprietary debit card accounts through EFTPOS terminals. Implementation is scheduled for 2009. The four types of transactions are “Medicare Rebate”, “General Purpose”, “Gaming” and “Government”.

• Work has commenced on creating a new database to provide a central repository for accessing and managing information on domestic card identifiers, including routing and settlement instructions. In addition to improving processing efficiencies, a central repository will ensure CECS members have access to consistent and accurate data.

• As part of the global migration to SWIFTNet FIN Phase 2, HVCS members have been upgrading to SWIFT’s new security infrastructure. Migration is scheduled for completion in October 2008, when SWIFT’s service for managing business relationships between financial institutions (RMA) has been adopted by all HVCS members.

• New coin handling procedures were introduced during the year to ensure best practice for Australia’s coin handling processes. Under the new standard, which came into effect across Australia in July 2008, no coin bag is to exceed 7kg in weight.

• ACDES members’ branches order and receive cash from each other. To ensure the quality of notes in circulation, new guidelines have been developed to assist branch staff in dealing with any damaged or unfit notes received in cash order deliveries.