The Payments System Board adopted an impatient, and interventionist, tone in its long-promised consultation paper on innovation in the payments system, released yesterday.Amid a survey of the issues facing the modernisation of mainly retail payments systems, the PSB suggests as options mandating investment by the banks; law reform to allow greater cooperation among banks, and even further direct public investment in payments architecture.The document is a consultation paper, with the Payments System Board, an offshoot of the Reserve Bank of Australia, aiming to develop a final paper in what it dubs "a strategic review" later this year or in early 2012.The PSB nominated three key areas for industry reform:-- a shift from next-day settlement of low-value retail payments to "multiple same-day settlements", including on weekends and on public holidays, and, potentially, a move to real-time, or close to real-time, payments;-- the inclusion of additional data, provided by the payer, to allow the recipient to reconcile the payment, a key demand of business;-- the adoption of international standards on payments messages (the ISO 2002 standard) developed by Swift, replacing the ageing Australian standard.A fourth issue of interest to the PSB is the prospect of developing an industry hub covering retail payments - a centralised system through which payments messages are sent to the recipient.The PSB mentions the prospect of the Reserve Bank of Australia, or some other public sector entity, investing alongside banks in any hub, citing "the possibility that there are circumstances where co-operative failings or incentive structures are such that innovations in the public interest cannot be delivered by the industry and should instead be delivered by the public sector, as occurred with the RTGS system, or with public sector involvement."The building blocks of such a hub, or hubs, already exists in a fashion, in the form of the upgraded data networks developed by banks and telecommunications companies, known by the acronym COIN, and coordinated over recent years by the Australian Payments Clearing Association.This renovated plumbing, the PSB notes, is resolving some of the complexity of access to the retail payments system, since new entrants need just a single physical connection to the network, rather than individual connections.Few have made this effort, with Tyro Payments, Strategic Payments Systems and Woolworths being three to build new switches. Cuscal, a service entity for credit unions, is also working on a switch.The merit of COIN only goes so far, the PSB argues, since "these arrangements maintain bilateral logical and business relationships between participants. Under these circumstances, there may be additional advantages to further centralisation in the form of a hub."The discussion paper makes guarded references to the Mambo project, sponsored by major banks, that is developing an electronic addressing system to speed up payments.However, as reported in Banking Day last month, support for this initiative is waning on the part of two big banks.From the PSB's point of view, Mambo may be one way to deal with the frustrations of business over the present limits on anyone paying a bill also sending