One of the main battlegrounds for banks in the coming 12 months will be the digital relationship they are able to foster with customers - and the payment options available will be key to that relationship.Speaking at CeBIT's Future of Payments conference in Sydney yesterday, Travis Tyler, head of e-channels for Westpac's St George brand, claimed that in spite of alternative payments channels emerging it would be the banks which continued to dominate payments. He said that companies like Apple, which has established a closed loop payment system through iTunes, would be trusted with consumers' "music relationship"."[But] when you are talking about moving your pay around or buying a car you need to have those trusted ecosystems in place."The banks, he said, would continue to dominate in this regard.Many presenters at yesterday's conference, however, were in general agreement that the banks and regulators were moving too slowly on payments reform, which would leave the gates open for innovative technology companies such as Google or Square to establish more of a foothold in the payments space. They pointed to Australian banks' history of flat-footedness, which saw them pass up the opportunity to take a one per cent stake for $1 million in PayPal in its early days, when it was seeking investors. A number of speakers also questioned the pace of Australian payments' regulation reform, with the Reserve Bank of Australia not being expected to release its final decision on payments innovation before the end of the year. Many of the proposed innovations, including real-time banking between banks, are not expected before 2016, however.But Brad Pragnell, head of industry policy for the Australian Payments Clearing Association, noted that payments still needed regulation. That regulation needed to be careful, though."This area is highly innovative at the customer end, we need to be careful about stifling that through monstering it through regulation," Pragnell said.He said it was important to have regulations or principles to guide the payments process but still allow competition to flourish.Pragnell said that globally "public regulators are trying to play a catalytic role to bring about systemic change" which would deliver both robust governance and accessible infrastructure.While the RBA's deliberations will necessarily focus on the Australian landscape, local banks were warned they needed to develop a more global perspective regarding the payments issue. Steven Coulter, managing director of technology start-up Emerging Thought - developer of the Controlabill application - said: "I think it will be global brands at the front end of payment. If people think too local they will be left behind."