The Australian government has officially announced plans to introduce new legislation that will give the Reserve Bank of Australia the authority to carry out activities to regulate digital payment services, including providers of virtual wallets.
Treasurer Jim Chalmers, in his statement released last Wednesday, October 11, said that the intention of the country’s leadership to establish a legislative monitoring regime in the mentioned sector of the financial industry is a response to the widespread use of digital payment services. According to him, currently, transactions in the virtual space are outside the regulatory zone.
The legislators intend to take control of the activities of digital services for the implementation and processing of payment transactions in order to eliminate the risks resulting from the lack of a monitoring system. According to the Australian Government, a high level of consumer protection will be provided in this case. Legislators are also convinced that the emergence of a regulatory system will promote competition and stimulate the introduction of innovative solutions.
The draft of the legal norms proposed by the government provides for the provision of the Reserve Bank of Australia with the authority to monitor new payment systems. The legislators also intend to allow the specified financial institution to establish additional supervision by regulators in relation to specific financial services and platforms whose activities contain risks to national security.
The bill was submitted for public consideration on October 11. Until November 1, this initiative of the Australian government will be open for feedback. By the end of this year, the bill will be submitted to Parliament.
Jim Chalmers stated that the proposed regulations outline the vision of a modern and efficient world-class payment system that is secure, affordable, and trustworthy. He also mentions that the rules can contribute to increased competition, more active implementation of innovative solutions, and increased productivity.
The media reports that the bill will expand the definition of the payment system and the participant in the existing laws of Australia. The Reserve Bank of this country will be authorized to track payment operations using digital wallets, similar to credit card networks and other transactions.
The Australian Government, as part of its current legislative efforts, is striving to ensure that virtual wallet providers meet the same standards and guarantees as traditional payment systems.
The Australian Banking Association reported changes in the preferences of consumers of financial services. This is evidenced by the fact that last year in the mentioned country the number of transactions made using mobile wallets amounted to 2.4 billion, although in 2018 this figure was recorded at around 29.2 million operations.
Apple and Google, which have virtual wallets in their ecosystems, do not agree with the plans of the Australian government. Technology giants note that consumers use their smartphones to make payment transactions using cards issued by banks. Based on this circumstance, companies claim that their role in the financial chain is limited and indirect.
In the summer of this year, the Australian government announced its intention to phase out the use of checks over the next few years. Over the past 10 years, the check volumes in this country have decreased by almost 90%.