The law creates a national-interest designation power with provision for special regulators and strengthens enforcement via civil penalties and enforceable undertakings; it will take effect three months after Royal Assent.
Australia’s Senate passed sweeping reforms to the country’s payments laws on September 4, clearing the Treasury Laws Amendment (Payments System Modernisation) Bill 2025 through both houses and sending it for Royal Assent.
The measure, introduced in late July, won Senate approval with four Opposition amendments agreed and was then finalised in the House the same day. Once assented to, the law will commence three months later.
At the heart of the package is an update to the Payment Systems (Regulation) Act 1998 which broadens the perimeter of what lawmakers deems a “payment system” and a “participant”, allowing regulators to capture newer services that have grown up outside the original framework.
Treasury’s parliamentary brief says the Reserve Bank of Australia (RBA) will be able to regulate emerging rails including digital wallets and buy now, pay later, as well as payments involving stablecoins.
The law also erects a clearer enforcement toolkit by creating a civil penalty regime and a formal power for the RBA to accept and enforce undertakings, alongside higher maximum penalties for certain criminal offences.
A second pillar is a set of ministerial powers intended for issues of national interest. The Treasurer will be able to designate special payment systems and direct nominated special regulators, adding a lever outside the RBA’s traditional remit for cases where broader public policy concerns arise.
The Parliamentary Library notes that these powers reflect recommendations from the 2021 payments system review and subsequent Treasury consultations on the modernisation agenda.
The Australian Banking Association (ABA) welcomed the Senate vote, arguing that the reforms finally bring tech companies operating mobile wallets into line with standards that already apply to banks and other regulated providers.
“It’s clear payments rules haven’t kept pace with new and emerging payments technologies. For the first time, digital wallets and other new payment methods will now be captured within Australia’s regulatory framework,” said ABA CEO Simon Birmingham.
“This is welcome progress and means global tech companies will be subject to the same oversight and consumer protection laws as the rest of the payments system. It’s only fair and reasonable that no matter how you pay, whether you tap your bank card or your mobile phone, you are afforded the same consumer protections.”
Support not universal
Not everyone is entirely in favour of the new law, however. Submissions cited in the Bills Digest record FinTech Australia urged statutory guardrails around the ministerial designation power, calling for an explicit duty to consult and publish impact analysis before any designation, and for competition to be written into the national-interest test, similar to approaches in the UK and New Zealand.
Block, the owner of Afterpay and Square, warned that extending card-style surcharging rules to BNPL without clear evidence of market failure would lift costs for consumers and blunt competition, and said any expansion of the perimeter should follow a holistic, evidence-based assessment.
Meanwhile, the Financial Services Council pressed for a positive duty on the Treasurer to consult industry before any special designation. Furthermore, Chartered Accountants ANZ questioned running a parallel designation track alongside the RBA, arguing it risks confusion and that a better fix would be to update the RBA’s mandate.
Separately, parliamentary scrutiny committees and Coalition senators pushed for stronger oversight of regulatory instruments, including making key determinations disallowable and subject to sunsetting.
These debates will now shift to implementation, including how secondary rules are drafted and how regulators coordinate the enlarged perimeter.
