Australia’s banks are calling on the government to promptly pass legislation to ensure that the country’s payments regulatory framework remains suitable as digital payments continue to surge.
According to the Reserve Bank of Australia, citizens are now making over 500 million payments each month using mobile wallets, totaling over $20 billion.
The Australian Treasury has proposed extensive reforms designed to expand the regulatory framework to include new products and services that are becoming prevalent in the digital economy. The goal is to amend the Payment Systems (Regulation) Act 1998 to update the definitions of ‘payment’ and ‘payments systems’ to encompass new payment methods.
The Australian Banking Association (ABA) argues that new legislation would grant the Reserve Bank of Australia (RBA) the authority to regulate all participants in the payments system, including major players like Apple and Google, thus fostering a level playing field with non-bank competitors.
ABA CEO Anna Bligh noted the significant evolution of the payments landscape, particularly with the rise of mobile wallets. “The payments system has rapidly evolved, yet regulations have not been updated for over 25 years,” Bligh stated. “When the current laws were established in 1998, cash and cheques were the dominant payment methods, internet shopping didn’t exist, and mobile phones still had antennas.”
Bligh emphasized that regions like the EU have recognized mobile wallets as part of the payments system and stressed the importance of Australia taking similar action. “Australians are now making 500 million payments each month with mobile wallets, and it’s essential that these transactions are included in the regulatory framework,” she said. “With mobile wallets becoming a dominant force in Australia’s payments architecture, it’s only fair that global tech companies are subject to the same oversight and consumer protection laws that other entities in the payments system adhere to.”
The ABA also expressed frustration with the government’s delays on this issue, noting that the proposed reforms were first introduced four years ago. “These reforms can be passed this sitting fortnight,” says Bligh. “They were first flagged over 1200 days ago and are urgently needed to ensure payments regulations remain fit-for-purpose and provide the necessary customer protections.”
The proposed reforms to the Payment Systems (Regulation) Act 1998 are included in the Treasury Laws Amendment (Miscellaneous Measures) Bill 2024.