Commonwealth and state ministers have signed off on a recently proposed model offered by e-conveyancing company Property Exchange Australia (PEXA) that will ensure healthy competition in the $270 million a year electronic property settlement market.
PEXA, led by former National Australia Bank executive Glenn King, submitted its proposed interoperability model late last year, designed based on more than a decade of operational experience.
Without interoperability consumers—predominantly lawyers, conveyancers and financial institutions—are forced to choose between the two e-conveyancing systems, supplied by the incumbent PEXA or its rival, ASX and InfoTrack-owned Sympli.
NSW, South Australia and Queensland have been in favour of interoperability for a number of years as has the Australian Competition and Consumer Commission and the Law Council of Australia.
Under PEXA's model, providers will be able to “inter-operate” with one another through a working system proposed to be in place by year’s end.
The temporary measure by which it "hosts" other providers—effectively a white-label service—will allow other ELNOs (Electronic Lodgement Network Operators) to enter the market sooner and develop services and products for different niches.
The initiative has been spearheaded by the Australian Registrars’ National Electronic Conveyancing Council (ARNECC), with PEXA sharing its expertise to help build a workable approach.
“We’re pleased to see that model has been formally endorsed by industry and government,” a PEXA spokesperson told The Urban Developer.
“PEXA is appreciative of the opportunity to work closely with government, and the regulator ARNECC, on tabling and agreeing to a model to deliver competition.”
PEXA’s platform currently enables Australian banks, credit unions and mutuals, as well as legal and conveyancing firms, to complete property transactions safely and efficiently.
Uncertainty had lingered over PEXA’s business model in recent months and the pricing of its services as rules for any competitive environment were drawn up.
“Having agreed key features of the proposed design, PEXA will continue to provide advice and support during the challenging implementation phase,” PEXA said.
“We would like to see real users of these services now engaged to help with the design, ensuring the solution meets their needs.”
PEXA, the monopoly operator in Australia’s e-conveyancing market, had claimed in the past it would be difficult for the two ELNOs to achieve uniformity.
Under its newly agreed interim plan, however, operators without their own infrastructure can use PEXA’s back-end services to process transactions in the market.
Its end goal is a single market “hub” by 2025 that will connect a variety of different ELNOs.