Debit cards are becoming the more favourable form of payment over cash, while cheques are almost non-existent and mobile phones are to be the future of payment systems.

This is what the Reserve Bank of Australia (RBA) found during its initial consultations for its strategic review of the payments innovation, which is due for release mid-year.

Speaking at the Cards and Payments Australasia 2011 Conference, RBA assistant governor (financial system) Malcolm Edey said the review was very much a cooperative project.

“When we announced the review, the first thing we did was to call for an initial round of consultations, both with industry and with any other interested parties that wanted to contribute. We've had a good response to that,” he said.

“We have had discussions (sometimes multiple discussions) with most of the main market players; we have talked to people working in particular fields of payments innovation; and we have had some discussions with end-users of the payments system.”

Edey highlighted that results indicated the use of cash has declined down, noticeably in traditional payment methods, down from 40 per cent to 30 per cent of the value of those payments.

On the other hand, debit cards have been substituted for cash, with scheme debit and eftpos transactions both gaining share.

It was also found that there has been a high adoption of online payments, with around 90 per cent of respondents saying they had access to the internet, either at home or at work. Of those, about 80 per cent reported having made an online purchase and almost 60 per cent reported an online transfer of funds to a family member or friend.

Edey also said the number of cheques written in Australia has been declining by an average of 9 per cent per year over the past decade.

“The result is that cheques, which were already an expensive form of payment, are becoming increasingly so. Nonetheless, our consultations have reinforced the fact that cheque use remains entrenched in certain areas because it meets a number of specific needs,” he said.

In addition to these issues, mobile payments and electronic purse systems are gaining a lot of interest and activity.

“The board's main interest will be in determining whether there are impediments to the development of mobile payments, for example in relation to standards,” Edey said.

“The next stage of the review will be seeking views on those issues, whether there are better ways to address them and whether there are new areas where a cooperative approach is needed.”