Global: Australian Banks Push for Swift Regulation of Mobile Wallets

Australia’s banking sector is calling on Parliament to expedite legislation that modernizes the country’s payment regulations, ensuring they remain relevant as digital transactions surge. According to the Reserve Bank of Australia (RBA), Australians now make over 500 million mobile wallet transactions each month, amounting to more than $20 billion.

In response, the Australian Treasury has proposed comprehensive reforms to expand the regulatory framework, updating the Payment Systems (Regulation) Act 1998 to redefine ‘payment’ and ‘payment systems’ to include emerging digital payment methods.

The Australian Banking Association (ABA) supports the proposed legislation, which would empower the RBA to regulate all entities operating within the payments system—including major tech firms like Apple and Google—to create a more balanced competitive environment.

ABA CEO Anna Bligh highlighted the urgent need for regulatory updates, emphasizing how much the payments landscape has evolved since the original law was enacted in 1998.

“When these laws were introduced, cash and cheques were dominant, online shopping didn’t exist, and mobile phones still had antennas,” Bligh stated.

She noted that other jurisdictions, such as the European Union, have already recognized mobile wallets as part of the regulated payments system and stressed that Australia must follow suit.

“Australians are now making 500 million payments each month via mobile wallets, and it’s crucial that these transactions fall under the regulatory framework. With mobile wallets playing an increasingly central role in our financial ecosystem, global tech companies must be subject to the same oversight and consumer protection laws as other payment system participants,” Bligh added.

The ABA also criticized the government for delays in implementing these reforms, pointing out that the changes were first proposed four years ago.

“These reforms could be passed within this sitting fortnight. They were initially proposed over 1,200 days ago and are urgently needed to keep Australia’s payment regulations fit for purpose and to safeguard consumers,” Bligh said.

The reforms to the Payment Systems (Regulation) Act 1998 are included in the Treasury Laws Amendment (Miscellaneous Measures) Bill 2024 and are expected to play a critical role in shaping the future of Australia’s digital payment landscape.