The Australian government has formally disclosed its intentions to enact fresh legislation, granting the Reserve Bank of Australia the authority to oversee digital payment services, including providers of virtual wallets, reports PaySpace Magazine.
Treasurer Jim Chalmers, in a statement released on Wednesday, October 11, announced that the government's move to establish a legislative framework for monitoring this specific sector of the financial industry is a response to the widespread adoption of digital payment services. Currently, digital transactions exist outside the realm of regulatory oversight. Legislators are seeking to assert control over digital payment service activities, encompassing payment processing, with the aim of mitigating the risks associated with the absence of a regulatory system. The Australian government contends that this will enhance consumer protection while fostering competition and encouraging innovative solutions.
The proposed legislation empowers the Reserve Bank of Australia to oversee emerging payment systems and potentially impose additional regulatory supervision on financial services and platforms deemed to pose national security risks. The bill was open for public feedback starting on October 11, with the government planning to submit it to Parliament by year-end. Jim Chalmers emphasizes that the proposed regulations envision a secure, affordable, and trustworthy world-class payment system, with the potential to stimulate competition, innovation, and productivity.
The media has reported that the bill will expand the definition of payment systems and participants under Australian law. The Reserve Bank of Australia will be granted the authority to monitor digital wallet transactions in a manner similar to credit card networks and other financial transactions. The Australian government aims to ensure that virtual wallet providers meet the same standards and guarantees as traditional payment systems.
The Australian Banking Association has noted shifts in consumer preferences for financial services. In the past year, mobile wallet transactions in the country reached 2.4 billion, a significant increase compared to approximately 29.2 million in 2018.
Notably, technology giants like Apple and Google, which offer virtual wallets within their ecosystems, oppose the Australian government's plans. They argue that consumers primarily use their smartphones for payments with bank-issued cards, maintaining that their role in the financial process is limited and indirect.
Earlier this year, the Australian government also revealed its intention to phase out the use of checks in the coming years, as check volumes have decreased by nearly 90% over the past decade.
