Australia’s government has begun working to introduce laws that would permit the central bank to regulate digital wallet providers including Apple Pay, Google Pay and China’s WeChat Pay.
Digital wallets like Apple Pay, Google Pay and WeChat Pay, have grown rapidly in recent years, but have not currently been designated as payment systems, placing them outside Australia’s financial regulatory system. Australia’s treasury documents showed that the draft law would expand the definitions of “payment system” and “participant” in the country‘s existing laws.
Google and Apple have maintained that customers only use their phones to use cards issued by banks to make payments, hence it isn’t a right cause for the Australian government to designate them as payment providers.
According to Reuters, the proposed regulations would enable the Reserve Bank of Australia (RBA) to monitor digital wallet payments just as it does credit card networks and other transactions. It would also give powers to the treasurer to order regulators to check if any digital payment platforms pose risks to the country.
Australia’s Treasurer, Jim Chalmers, revealed in a statement that the government was “addressing the risks posed by new digital payment services, which are currently unregulated, to protect consumers, promote competition and spur innovation.
The Australian Banking Association, in a June report, stated that it had noticed a shift in payment preferences in recent years, with the number of mobile wallet transactions in the country surging from 29.2 million in 2018 to 2.4 billion in 2022.
Payments infrastructure and the regulatory framework, however, have not kept pace with transitions in finance, particularly in Australia’s digital economy and payments.
The government has sought feedback from stakeholders on the draft legislation until 1st November. The legislation is expected to be introduced to parliament this year.
