Access is the first of "two issues in the Australian payments system that are potentially going to be of interest to financial regulators," as the fintechs and neobanks flurries recur, Michelle Bullock, Reserve Bank assistant governor (financial system), told a bond summit in Shanghai yesterday."New payment service providers will need access to the underlying payments infrastructure to compete with the incumbent financial institutions," Bullock stated. "Non-bank providers of payment services already have access to accounts at the Reserve Bank for the purposes of settlement. But they will also need access, either direct or indirect, to payment clearing systems. "While they might be able to commercially negotiate an agency arrangement, this could add to their costs and they might therefore prefer direct access." Bullock spelled it out to the Australian banking oligopoly."If incumbent financial institutions control access, they might seek to put up unreasonable barriers to entry. Regulators will need to be alert to potential anti-competitive conduct," she said."The second area is stored value products. Traditionally, payment services have been provided by regulated financial institutions through transaction accounts. These institutions are prudentially supervised to ensure that the public can have confidence that they will be able to meet their financial commitments under all reasonable circumstances. "In addition, in most countries, including Australia, retail deposits would be protected if a bank were to fail. "But some of the new entrants are holding client funds on their books as 'stored value'. This raises a number of policy questions. "Should the funds being held be treated like deposits? If not, do the firms holding the funds need to be regulated in some other way to protect consumers? "If the new entrants are very large, like the big technology companies, they could potentially hold substantial amounts of value in their closed systems. What are the implications for systemic risk of such a market structure? Regulators are still working through these questions."