The Australian government is looking into the best way to overhaul its current infrastructure for financial regulation to enable stronger oversight of digital wallets and payments from Big Tech companies like Apple, Google, WeChat and others.
“Financial regulation If we do nothing to reform the framework, it will be Silicon Valley that determines the future of a critical piece of our economic infrastructure,” Australian Treasurer Josh Frydenberg said in a post on the government’s website on Monday (Aug. 30), which was also published in the Australian Financial Review.
Frydenberg said Australia processes roughly $650 billion worth of transactions daily, which includes about 55 million payments that rely on the network being safe, fast and efficient.
Consumers use the current financial system every day for eCommerce, tap and go, money transfers and more. The post noted that the system is evolving in the face of new technological innovations, new business models, and changes in how people prefer to shop and bank.
Frydenberg pointed to digital wallets, buy now, pay later (BNPL), cryptocurrencies and stablecoins as each having “profound” influence. Collectively, he added, “it’s a revolution” — yet the regulatory framework for payments “remains largely unchanged” since 1996.
The regulations being considered will empower the treasurer to classify Big Tech platforms as designated payment systems. Currently, companies like Google Pay and Apple Pay fall under alternate regulations.
In 2020, the government hired lawyer and payments pro Scott Farrell to review the current regulatory infrastructure of the country’s payments network. Farrell advised that the government should collaborate with the industry and develop a tactical initiative for the broader payments landscape that would result in one “integrated licensing framework.”
Frydenberg said he is “committed to reforming our payments system,” and is striving to facilitate both competition and the advancement of new technologies.
“… the regulatory sandbox is empowering businesses to trial new products, so too a modernized regulatory framework for our payments system will further drive Australia’s digital transformation,” he said.