After a successful pilot program where users initially trialled the bill payments service with Bitcoin (BTC), Ethereum (ETH) and Bitcoin Cash (BCH), Cointree will now make the full product available to Australians. The expansion of the service across its crypto portfolio will see Cointree provide the largest selection of coins to pay bills within the APAC region.

Cointree will also offer the market’s lowest fees for bill payments, compared to similar services who are currently charging up to 4.2% per bill payment.

Jess Renden, Operations Manager at Cointree said early use cases for the technology was promising, with individuals and businesses both turning to the service to put their crypto-assets into use.

“Using cryptocurrency to pay bills is a feature that our users have requested for some time. Our members were looking for an easy and safe way to use cryptocurrency because they recognise the enormous utility for both personal and business transactions.

“Our partnership with Gobbill enables this, combined with the benefit of reducing fraud to ensure our members' security,” he said.

“As crypto becomes more mainstream we want to incorporate it into our member's everyday lives to provide a variety of services and options. We’re already seeing crypto being used to pay bills including credit cards, rent, utilities, memberships, ATO bills, travel cards, phone bills and more.”

Shendon Ewans, CEO and co-founder of Gobbill said: “We are excited to launch the Cointree and Gobbill 'pay any bill with any coin' service. It's a fully Australian regulated service that is simple, safe and secure. With over 40,000 Australian billers, the widest range of coins at a low fee, we expect everyday bills such as utilities and phone bills to be paid using digital currencies”.
Gobbill’s annual payment volumes are set to more than double last year’s. It is growing rapidly and will be a strategic partner for Cointree as it expands its footprint within the Australian market.

The partnership will see Cointree offer a fully regulated crypto bill payment service through its partnership with Gobbill who is an Authorised Representative of Australian Financial Services Licence Holder.

Cointree is recognised amongst Australia’s most safe and trusted blockchain businesses, holding an AUSTRAC registration, an ADCA membership and several strong partnerships with Australian businesses.

During the past months, the Federal Reserve’s Faster Payments Task Force has made huge steps towards the implementation of a faster payments / real-time payments system in the US. As a result, the Fed’s RTGS (Real Time Gross Settlement) system is said to be ready to launch in 2020. Immediate loan availability, mobile payments, real-time invoicing and faster government payments to citizens are some of the gains that the new system would provide, both to consumers and businesses.

The benefits are also evident for banks. The Clearing House’s RTPS (Real Time Payments System), an alternative system to the Fed’s RTGS, is already operating in the US with 50% of the country’s 10,000 financial institution using it. Enhanced operational efficiency and the reduction of branch footfall are already lifting revenue among US banks.

Despite these benefits, there remains a number of challenges for merchants and banks alike.

Challenges for merchants 

Lack of awareness and education are among the main factors that are slowing down merchant adoption of faster payments / real-time payments in the US. According to the Fed, “29BN transactions, or 12% of all US payments annually, could benefit from faster authorization, clearing, settlement and/or availability of funds.” From a B2B payments perspective, expense reimbursement and regular payrolls are amongst the areas that could benefit most from the adoption of faster payments / real-time payments.

Challenges for banks

The presence and implementation of two systems could slow down adoption levels of both systems and cause wider operational issues for banks. This is similar to the situation we are witnessing in Europe at the moment where there are two competing regional faster payment schemes in operation, notably SEPA Instant Credit Transfer (a European Payments Council initiative) and TARGET Instant Payments Settlement (a European Central Bank initiative).

According to a recent survey carried out by the Center for Payments among 700 financial institutions in the US, only a third of financial institutions have developed a payments strategy oriented towards optimal resource allocation, with the majority unsure about their readiness for the faster payment’s evolution.

Interoperability and technology integration also need to be considered. For the two systems to effectively co-exist, both RTPS and RTGS would need to have the same or very common architectural components. Ensuring collaboration between the TCH and the Fed is critical in order to drive the implementation of a faster payments / real-time payments in the US. Mechanisms such as the US. Faster Payments Council will be key to ensuring cross-solution risk mitigation and efficient communication.

Investment in technology is another critical factor that can affect the adoption of a faster payments / real-time payments. According to the Center for Payments survey, almost half of US financial institutions feel the current product offering from core technology providers is insufficient to respond to the changes being seen in the payments industry. As a result, banks will need to lead the efforts themselves and update their legacy systems in order to build a flexible infrastructure.

Conclusion and outlook

Although the Fed aims to have its own faster payments / real-time payments solution ready by 2020, for it to succeed, the system will need to have the consensus of all stakeholders involved, including credit unions and smaller banks. Still, testing and onboarding will mean that this process is very unlikely to be finished before next year.

The year ahead offers an interesting perspective, especially regarding bank adoption and product innovation. Once banks have adapted their infrastructure and integrated into the TCH network, they will need to test and launch new products with specific functionalities linked to real-time interbank settlement.

Further down the line, it will be interesting to see how the RTGS and the RTPS will co-exist as they launch new features and evolve their technical infrastructure and interoperability.

But one thing that needs to happen now is for merchants to be educated about the benefits of faster payments / real-time payment settlements, especially when it comes to new features such as real-time interbank payment-by-payment messaging, enhanced reconciliation, increased data harvesting capabilities and the implementation of the new concept of Request for Payment.

a report on progress on implementing the FSB’s recommendations on remittance service providers’ access to banking services.

Addressing the decline in correspondent banking relationships: Progress report

The decline in the number of correspondent banking relationships remains a source of concern for the international community, as the number of active correspondent banks declined by 3.4% in 2018, bringing the cumulative decline since 2011 to 19.3%. Concentration increased, as fewer correspondent banks are handling payments. Access to correspondent banking relationships remains a critical issue in some regions and jurisdictions. The Committee on Payments and Market and Infrastructures (CPMI) on 27 May published the full set of data on the latest developments on the number of correspondent banking relationships.

With the international components of the FSB-coordinated action plan largely in place, attention has turned to monitoring of implementation:

There is growing evidence of the concrete implementation of regulatory clarifications by national authorities, following the guidance provided by the Financial Action Task Force and the Basel Committee on Banking Supervision.

To support domestic capacity building in jurisdictions that are home to affected respondent banks, official sector technical assistance still requires ongoing coordination. Industry initiatives to support capacity building are gaining traction, especially the additional guidance developed by the Wolfsberg Group to implement their Correspondent Banking Due Diligence Questionnaire.

The technical measures recommended by CPMI to improve the efficiency of due diligence procedures and reduce compliance costs are now generally available for use, but their concrete implementation still requires continued focus by industry and the official sector, such as the use of the Legal Entity Identifier in payment messages and practical steps to support effective information sharing.

Should the situation deteriorate further, the FSB, the relevant standard-setting bodies and other stakeholders including international organisations and the private sector would consider whether further actions should be taken to address the issue.

Remittance service providers’ access to banking services: Monitoring of the FSB’s recommendations

The reduction in correspondent banking relationships has had a significant impact on remittance service providers’ ability to access banking services, particularly acute in those developing countries where remittance flows are a key source of funds for households.

The report assesses implementation of the FSB’s March 2018 recommendations to address problems that remittance service providers have accessing banking services. The report finds that, while positive steps have been taken in a number of areas, further work by national authorities, international organisations, remittance firms and banks is needed.

Jurisdictions have adopted or implemented a number of good practices and procedures to improve their supervisory frameworks for remittance firms and enhance coordination; authorities are responding to and accommodating innovative technology approaches in their regulatory frameworks; and significant technical assistance is being directed at the issue both at a global level and directly to affected jurisdictions.

Dialogue between remittance firms, banks and authorities responsible for supervision of the remittance sector has been useful, but has not led to tangible next steps. In order to make further progress, it is important to have a common understanding of issues facing remittance firms in their access to banking services and banks’ expectations concerning remittance firms’ anti-money laundering compliance.

The remittance report will be delivered to the G20 Finance Ministers and Central Bank Governors meeting in Fukuoka on 8-9 June.

Alexander Karrer, Chair of the FSB’s Correspondent Banking Coordination Group and Deputy State Secretary at the Swiss Federal Department of Finance, said: “The data shows that concentration in correspondent banking is increasing further, with countries and banks relying on fewer correspondent banks. We will continue to monitor the data and to coordinate the effective implementation of the agreed action plan to clarify regulatory expectations, provide technical assistance and make due diligence more effective. We stand ready to adopt further measures as necessary, as we did last year for remittance firms’ access to banking services, to preserve the smooth processing of cross-border payments.”

Background

The FSB launched its four-point action plan in November 2015 to assess and address the decline in correspondent banking. The plan covers:

Further examining the dimensions and implications of the issue;

Clarifying regulatory expectations, including guidance from FATF and BCBS;

Domestic capacity-building in jurisdictions that are home to affected respondent banks; and

Strengthening tools for due diligence in correspondent banks.

The FSB’s March 2018 recommendations to address problems that remittance service providers have accessing banking services cover:

Promoting dialogue and communication between the banking and remittance sectors;

International standards and oversight of the remittance sector;

The use of innovation in the remittance sector and its possible role in enabling RSPs greater access to banking services; and

Technical assistance on remittance-related topics.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Randal K. Quarles, Vice Chairman for Supervision, US Federal Reserve; its Vice Chair is Klaas Knot, President, De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.