NPP Australia, BPAY Group and Eftpos Australia may combine in some form, with the boards of the three domestic payments organisations investigating the business case.
An appealing and even obvious strategy from the outside, it is already clear that conservatism and pride in solutions that individual entities have developed will be a barrier to progress.
Bob McKinnon, the chair of NPP Australia, yesterday announced the NPPA board “has resolved to facilitate the creation of an Industry Committee as a structured, independent forum, with a legal foundation, in which the 22 shareholders of the three organisations will be invited to participate to continue discussions.
McKinnon said the NPPA board “has consulted a number of its shareholders, who are also shareholders in BPAY and Eftpos, along with other stakeholders and it is clear from this process that there is appetite to explore the potential case for consolidation.
“The intention of this Industry Committee is to create an inclusive forum that can consider whether the consolidation of the three entities into one organisation might be in the public interest and in the interests of the entities' existing shareholders, and if so, how to best achieve that.”
The Industry Committee “is intended to focus on issues of ownership, structure, and corporate governance,” McKinnon said.
This process would be independently chaired and supported by independent resources.
It is anticipated this process could take up to nine months.
Stephen Benton, CEO of Eftpos, said “any outcomes must be in the public interest, and drive efficiency and effective payment services in the short or long-term/
“Any investigation should look at a range of options.
“Any solutions should drive for the most appropriate and optimum outcomes for end users in the long run, so any investigation into consolidation should include consideration of collaboration between the three schemes, that currently have a different focus, to greater public benefit.
“To this end, we query the timing of NPP’s announcement given all the country has been going through.”
Benton listed alternatives to consolidation as including “collaboration on core infrastructure assets, while competing on transactions and continuing to drive competition.
“Collaboration may have advantages such as speed to market, reduced investment, increased resilience and better leveraging of core assets.
NPP Australia said they had have met with the ACCC and RBA and advised them of this process.