Australian government proposes new regulations for digital wallet providers
The Australian government has announced plans to bring digital wallet providers into the scope of the country’s financial regulatory system.
Australian government moves in on digital wallet providers
The proposal, which is expected to be introduced to parliament this year, would redefine how the country’s Payment Systems Act 1998 interprets the terms ‘payment’ and ‘payments systems’.
Popular digital wallet providers, including Google Pay and Apple Pay, are currently not specified as payment systems, which means that they’re not monitored or regulated in the same way as other mainstream financial services.
The reclassification would keep the Reserve Bank of Australia’s regulatory oversight abreast with new and emerging payments systems, while the introduction of a new “ministerial designation power” would enable it to investigate and monitor “particular payments services or platforms that present risks of national significance”.
Treasurer Jim Chalmers said in a statement this week that the proposed amendments set out “a vision for a modern, world class and efficient payments system that is safe, trusted and accessible, enabling greater competition, innovation and productivity”.
In line with global digital payment trends, Apply Pay was first introduced in Australia in November 2015 as a means to boost the country’s payment infrastructure. Although it gained widespread acceptance, notably through its partnership with the payments provider Cuscal, Apple had to fight back against resistance from the country’s banking heavyweights, namely Westpac, National Australia Bank (NAB) and Commonwealth Bank of Australia (CBA), a battle it ended up winning.
Just a few short months after Apple’s debut, Google Pay entered the Australian market in July 2016, with Australia and New Zealand-based banking group ANZ being the first to launch the service.
The expansion of the regulatory forces around how these services are delivered is expected to reshape the consumer protections incurred in their use, and as Chalmers previously explained, could inspire a new set of standards that could foster increased innovation and competition within a markedly booming environment for digital payment capabilities.
