Apple and Google will soon be required to comply with rules already imposed on credit cards and EFTPOS transactions in an attempt by the federal government to better protect consumers.
A growing number of Australians are using digital wallets, such as Apple and Google Pay, that are loaded on a phone to pay for goods and services.
About 35 per cent of card transactions in the June quarter were made using digital wallets, compared to 10 per cent in early 2020.
Figures from the Reserve Bank of Australia reveal nearly two-thirds of people aged between 18 and 29 use digital payment systems on mobile phones, and the number of people over 65 using digital wallets has also tripled since 2019.
Treasurer Jim Chalmers has argued that new payment systems, like digital wallets, should be regulated in the same way as credit cards, EFTPOS and other transactions.
The regulations would ensure more transparency around costs charged to consumers and businesses and would not result in any material change to how consumers use the digital payment services.
However the treasurer, who has has released draft legislation to reform the Payment Systems (Regulation) Act, said it would protect consumers, promote competition and spur innovation.
“As payments increasingly become digital, our payments system needs to remain fit for purpose so that it delivers for consumers and small businesses,” Jim Chalmers said in a statement.
“Apple Pay can only operate with an existing debit, credit or prepaid card issued by a third party … Apple does not have access to a cardholder’s account to determine whether funds are available … in offering Apple Pay, Apple does not collect any transaction information.”
However some major banks, including ANZ, wrote in favour of the reforms.
“We support the government’s objective to broaden and modernise the regulation of the payments system,” the bank’s statement said.
“The proposed reforms would provide clarity and consistency of regulatory oversight of the payments system and entities that play a role in the system.”
Under the proposed changes, the definition of “payment” and “payments systems” will be updated to include new digital payment methods.
That would allow the Reserve Bank of Australia to be able to regulate digital wallet providers, like it already does with credit cards.
A new ministerial power would also be introduced so that the minister can subject certain payment services to additional oversight by regulators if he or she considers the platform presents a risk of national significance.
The draft legislation does not list what the national significance considerations are, as requested by some in their submissions to the consultation process
(ABC)
