Australia’s banking sector is pushing for urgent legislative reform to modernise the country’s payments regulations framework, as digital transactions, particularly mobile wallet payments, soar.
With Australians making over 500 million mobile payments monthly, totalling more than $20 billion, industry leaders argue that outdated regulations must be updated to reflect the current payments ecosystem.
The Payment Systems (Regulation) Act 1998, enacted when cash and cheques were dominant, has remained unchanged for over 25 years despite the rise of digital wallets, online shopping and mobile transactions.
The Australian Treasury’s proposed amendments seek to broaden the definitions of ‘payment’ and ‘payment systems’ to incorporate modern digital payment methods.
The reforms would also extend the regulatory reach of the Reserve Bank of Australia (RBA), allowing it to oversee all participants in the payments ecosystem, including global tech giants such as Apple and Google, ensuring fair competition with non-bank payment providers.
Banking Industry Calls for Immediate Action
The Australian Banking Association (ABA) has been vocal in its demand for swift action from the government.
ABA CEO Anna Bligh has underscored the urgency of these reforms, arguing that Australia risks falling behind global counterparts if it does not regulate mobile wallet providers effectively.
“The payments system has rapidly evolved, yet regulations have not been updated for over 25 years,” Bligh said. “When the current laws were enacted in 1998, internet shopping didn’t exist, and mobile phones still had antennas.”
Bligh pointed out that other jurisdictions, such as the European Union, already regulate mobile wallets, recognising them as part of the financial system.
“Australians now make 500 million mobile payments every month,” she continued. “It is only fair that global tech companies operating in this space are subject to the same oversight and consumer protection laws as traditional payment providers.”
Delays in Reform Raise Concerns
The ABA has criticised the government for its slow response, noting that these reforms were first proposed four years ago.
The association insists that the legislative updates should be passed in the current parliamentary sitting.
“These reforms were first flagged over 1,200 days ago,” Bligh continued. “They are urgently needed to ensure that payments regulations remain fit for purpose and provide the necessary consumer protections.”
The proposed updates to the Payment Systems (Regulation) Act 1998 are part of the Treasury Laws Amendment (Miscellaneous Measures) Bill 2024, which, if passed, would position Australia’s regulatory framework in line with global digital payment standards.
A Critical Moment for Australia’s Payments Landscape
With mobile wallets becoming a dominant force in Australia’s payments ecosystem, banks and payment providers are looking for regulatory clarity and a level playing field.
While the Treasury’s proposed reforms are widely supported by financial institutions, the question remains whether the government will act swiftly enough to keep pace with digital transformation.
For businesses and consumers alike, the outcome of these legislative updates will shape the future of Australia’s payments industry, ensuring that security, fairness and competition remain at the forefront of financial services in the digital era.
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