A Sydney-based fintech has reignited a public controversy over King Wood & Mallesons’ partner Scott Farrell’s role as chair of the Treasury review into the Australian payments system.
In a partly-redacted submission to the ACCC’s inquiry into the proposed merger of the New Payments Platform with Eftpos Australia and BPay, direct debit management company, Controlabill Pty Ltd raises concerns about Farrell’s potential conflicts of interest in leading the Treasury review.
Controlabill, which is majority-owned by former major bank executives Stephen Coulter and Bernard Wright, says it holds patents and copyrights over the use of a pull payments process that it believes the NPP intends to copy.
NPP Australia is planning to launch a new business capability formerly known as the Mandated Payment Service and now branded PayTo.
PayTo will allow customers to authorise third parties to initiate payments from their bank accounts using the NPP.
In its submission to the ACCC, Controlabill says it has raised concerns about potential breaches of its patents with NPP Australia’s legal representatives at King Wood & Mallesons.
Given KWM’s relationship with NPP Australia, Controlabill questions the appropriateness of Farrell’s appointment to lead the Treasury review.
Banking Day revealed last year that Farrell is the head of KWM’s fintech practice that counts NPP Australia as a major client.
As head of the Treasury review, Farrell has been asked by the Morrison Government to make recommendations on the governance of payments regulation and to assess specific matters relating to the adoption of NPP services by Australian banks.
“KWM works for NPPA,” Controlabill states in its submission to the ACCC.
“We believe that the inquiry into governance within the industry (the Treasury review) should be independent and at arms-length from all parties and that KWM should recuse itself.”
Controlabill calls on the ACCC to request that Treasury terminate KWM’s involvement in the payments review.
“That the ACCC approach Treasury to recommend the revocation of the KWM review of governance and put said to tender,” the company tells the regulator in its submission.
Controlabill also raises concerns about Farrell’s role as head of a government inquiry into the consumer data right framework that delivered policy recommendations in December.
“Controlabill is already concerned that the report into the future direction of the Consumer Data Right is strongly biased in favour of NPPA,” the submission states.
The company calls on the ACCC to investigate the findings of the CDR inquiry “for bias in its recommendations as KWM partners firm was clearly already acting for interested parties”.
As part of its submission to the ACCC, Controlabill attached a letter it received from KWM in July last year in which the law firm rejects claims that NPP Australia had infringed Controlabill’s patents.
“NPPA has invested in the development and protection of its intellectual property and, naturally, seeks to ensure that it does not infringe the intellectual property rights of any third parties,” KWM told Controlabill in the letter.
“It therefore takes your allegations that the NPP or the proposed Mandated Payment Service(MPS) infringes your company’s intellectual property seriously.
“The NPP is fundamentally a different system, in both architecture and function, to that disclosed and claimed in the Patents.”
According to ASIC records Coulter and Wright are the largest shareholders in Controlabill, which was founded in 2006.
Coulter is well known in the banking industry through his role as head of CBA’s ecommerce business in the early 2000s.
Before joining CBA, Coulter led NAB’s consumer banking operations in Asia.