Australia's banks are urging the government to swiftly pass legislation that will ensure the counry's payments regulatory framework remains fit-for-purpose as digital payments continue to skyrocket.
According to the Reserve bank of Australia, each month citizens are now making over 500 million payments with mobile wallets worth over $20 billion.
The Australian Treasury has proposed far-reaching reforms that will widen the regulatory net to incorporate a new wave of products and services that are making the running in the digital economy. The aim is to amend the Payment Systems (Regulation) Act 1998 to update the definition of ‘payment’ and ‘payments systems’ to capture new methods.
The Australia Banking Association says new legislation will give the RBA powers to regulate all players within the payments system including Apple and Google, to create a level playing field with non-bank competitors.
ABA CEO Anna Bligh says the payments landscape has evolved significantly with the introduction of mobile wallets.
“The payments system has rapidly evolved, yet regulations have not been updated for over 25 years,” says Bligh. “When the current laws were made in 1998, cash and cheques were the dominant payment methods, internet shopping didn’t exist and mobile phones still had antennas.
She points out that jurisdictions such as the EU have taken steps to recognise that mobile wallets are part of the payments system, and that it’s time for Australia to do the same.
“Australians are now making 500 million payments each month with mobile wallets and it’s imperative that these payments are captured within the regulatory framework," she says. “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 as the rest of the payments system."
The ABA implicitly criticises the government for foot-dragging on the issue, pointing out that the reforms were first mooted 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.”
Reforms to the Payment Systems (Regulation) Act 1998 are contained within the Treasury Laws Amendment (Miscellaneous Measures) Bill 2024.