Australia: Correspondent Banking, Settlement & Access

Correspondent Banking, Settlement & Access

The analytical spine of W12 is the asymmetry between ADIs — which hold full prudential authorisation and direct Exchange Settlement Account access — and non-bank payment institutions, which access the payments system through ADI intermediaries. The Australian payments-reform cycle is now directly engaging with this asymmetry, though the resolution is deferred to a review that has not yet commenced.

The Reserve Bank of Australia has confirmed it will review its Exchange Settlement Account access policy commencing H2 2026, contingent on the first tranche of PSP-licensing reforms having passed Parliament. The second phase of that review includes proposed common-access requirements under which APRA would set proportionate regulatory arrangements for non-bank PSPs seeking direct ESA access. This sequencing is significant: the licensing reforms that bring non-bank PSPs into the regulatory perimeter are intended to precede the access-policy review, on the logic that a non-bank PSP seeking direct central-bank settlement access should first be subject to a formal regulatory framework.

The bank versus non-bank access asymmetry has a second dimension in the current reform cycle: the safeguarding trust-account requirement (W1b) mandates that non-bank PSPs hold customer money in a trust account with an Australian ADI. This creates a statutory dependency on ADI banking relationships that is distinct from, but related to, the ESA access question. A non-bank PSP that cannot obtain or maintain an ADI trust account cannot satisfy its safeguarding obligation; a non-bank PSP that cannot obtain direct ESA access must route payments through an ADI intermediary. Both constraints reinforce the structural position of ADIs as gatekeepers to the Australian payments system, even as the licensing reforms formally expand the regulatory perimeter to include non-bank PSPs.

The W12 module has no new corridor-level or correspondent-banking-specific developments this cycle beyond the ESA access review announcement. The module's trajectory is established rather than escalating, reflecting the fact that the access question is on the regulatory agenda but not yet in active consultation.

Outlook

The ESA access review is expected to commence H2 2026, subject to the Tranche 1 licensing package having passed Parliament. The review's outcome will be the most consequential structural development for non-bank PSPs in the Australian market over the medium term. If the review results in a credible direct-access pathway for non-bank PSPs, it will materially alter the competitive dynamics between bank and non-bank payment providers. If it results in a more limited or conditional access framework, the ADI intermediation layer will remain the structural ceiling for non-bank PSPs.