The federal government has released an exposure draft of legislation that would give the RBA the power to regulate digital wallets and buy-now-pay-later (BNPL) providers.
The powers were first mooted in December 2022, and a consultation was opened in June 2023.
In a statement, Treasurer Jim Chalmers said the legislation would give the RBA regulatory powers over “new and emerging payment systems” and provide a ministerial designation power so that payment systems that present “risks of national significance” could be subject to additional regulatory oversight.
The bill would also introduce civil penalty provisions into the Payment Systems (Regulation) Act 1998; add enforceable undertaking provisions; and update the criminal penalties in the Act.
In their submissions to the June 2023 consultation, both Apple and Google opposed their digital wallets being regulated as payment systems.
Apple [pdf] said it “does not itself provide financial or payment services in Australia.”
“Apple does not issue debit, credit or prepaid cards in Australia, nor does Apple acquire, process, authorise or execute transactions.”
Google [pdf] took a similar stance, writing it “is not involved in the money flow nor involved in the authorisation of a transaction which rests solely with the issuing bank.”
“Google Pay as a technology platform partially facilitates these transactions through the transmission of electronic bank information.”
As noted in the explanatory memorandum [pdf] to the bill, the expanded definition of payment system would also include BNPL products, cash in transit services, and cryptocurrency payment systems if they provide services to existing payment systems like Visa or Mastercard.
The legislation would also resolve the hotly contested issue of access to digital wallet services, by allowing a regulator to impose an access regime on participants in a payment system.
The current consultation is open until November.
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