Australian banks are calling on Parliament to make progress with legislation around payments modernisation which has remained stagnant for several months.
The Treasury Laws Amendment (Miscellaneous Measures) Bill 2024 was launched in the House of Commons in November 2023 as the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023.
This original piece of legislation was finally cleared after its third reading in October 2024 and subsequently presented to the Senate, with its first reading in the upper house occurring on 10 October.
However, the Senate decided to split the Bill in two, creating the Treasury Laws Amendment Bill 2024. This has further drawn out the legislative process, and the Australian banking industry is keen to see further progress.
“The payments system has rapidly evolved, yet regulations have not been updated for over 25 years,” said Anna Bligh, CEO of the Australian Banking Association (ABA), an industry trade body.
“When the current laws were made in 1998, cash and cheques were the dominant payment methods, internet shopping didn’t exist and mobile phones still had antennas.”
Google and Apple
Like other developed economies, Australia has seen a proliferation in digital wallet usage and adoption in recent years. Digital wallets have become the main competitors to debit and credit cards as a primary payment method, particularly those provided by Google and Apple.
The ABA cites data released by the Reserve Bank of Australia (RBA) showing that over 500 million payments worth over AUS$20bn are made in Australia each month. The association believes this needs to be addressed in regulation.
Terms of the legislation will grant the RBA new powers to better regulate Australia’s evolving and rapidly digitising payments landscape. For example, the Reserve Bank will be able to designate certain payments systems, which will then be considered ‘designated payment systems’ in regulation thereafter.
The Bank would also be able to impose an ‘access regime’ on participants in a designated payments system, determine standards to be complied with within these systems, and give directions to companies within the systems.
Australia’s payments regulation needs to be fit for purpose to ensure all consumers are protected, the ABA asserts. It is notable that the ABA has singled out Google and Apple in its own statement, yet neither firm is mentioned in the legislation.
This does not mean that Google and Apple’s growing role in payments has not been noticed by Australian regulators or legislators, however. It certainly has been in other developed Western jurisdictions, such as the US and the EU.
In the former, Google Pay was placed under the supervisory authority of the Consumer Finance Protection Bureau (CFPB) last year, while in the EU a long-running antitrust case saw Apple grant smaller competitors access to its tap-to-pay technology.
“We are in a digitally dominant world now. Jurisdictions such as the EU have taken steps to recognise that mobile wallets are part of the payments system, and it’s time for Australia to do the same,” said the ABA’s Bligh.
She concluded: With mobile wallets becoming a dominant force in Australia’s payments architecture – it’s only fair that global tech companies are subject to the same oversight and consumer protection laws as the rest of the payments system.
“These reforms can be passed this sitting fortnight. They were first flagged over 1200 days ago and are urgently needed to ensure payments regulations remain fit-for-purpose and provide the necessary customer protections.”
