Australia is set to introduce legislation governing the use of Apple Pay and other digital wallets.
The new rules, scheduled to be announced this week, would place this payment method under the same regulatory oversight as credit cards, Reuters reported Monday (Nov. 27).
“We are modernizing Australia’s payments system to ensure it meets the needs of our economy now and into the future,” Treasurer Jim Chalmers said in a statement. “We want to make sure the increasing use of digital payments occurs in a way that helps promote greater competition, innovation and productivity across our entire economy.”
According to Reuters, regulators are reacting to a huge jump in digital wallet use, particularly among younger Australians. Transactions from digital wallets were part of 35% of card transactions in the second quarter, compared to 10% in early 2020. And two-third of consumers in Australia between 18 and 29 use mobile payments, up from under 20% before COVID-19.
That’s in keeping with recent findings from PYMNTS Intelligence showing that around three in every five U.S. consumers who tried a new payment method in the last year did so with digital wallets, compared to just 13% for credit cards.
“Digital wallets, we found, offer convenience as consumers track their payments. Moreover, 4 out of 10 consumers who tried this method reduced the use of other payment methods after beginning their use of digital wallets,” PYMNTS wrote.
Meanwhile, regulators in the U.S. are also proposing new rules that would cover the use of digital wallets.
The Consumer Financial Protection Bureau (CFPB) said earlier this month that many of the companies offering these wallets are not subject to CFPB supervisory examinations, and has proposed bringing them under the same regulatory scrutiny as large banks.
“Payment systems are critical infrastructure for our economy. These activities used to be conducted almost exclusively by supervised banks,” said CFPB Chair Rohit Chopra. “Today’s rule would crack down on one avenue for regulatory arbitrage by ensuring large technology firms and other nonbank payments companies are subjected to appropriate oversight.”