Apple and Google will soon be required to comply with rules already imposed on credit cards and EFTPOS transactions in the federal government’s bid to better protect consumers.
- Digital wallets will be subject to the same regulations as credit cards and EFTPOS.
- Apple expressed concern that it could stifle technological innovation
- Treasurer says reforms will promote competition and transparency
A growing number of Australians are using digital wallets, such as Apple and Google Pay, loaded onto a phone to pay for goods and services.
Around 35 percent of card transactions in the June quarter were made using digital wallets, compared to 10 percent at the start of 2020.
Reserve Bank of Australia figures reveal almost two-thirds of people aged 18 to 29 use digital mobile payment systems, 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 regulation would ensure more transparency on the costs charged to consumers and businesses and would not result in any significant changes to the way consumers use digital payment services.
However, the Treasurer, who released a bill to reform the Payment Systems (Regulation) Act, said it would protect consumers, promote competition and drive innovation.
“As payments become increasingly digital, our payments system must remain fit for purpose to meet the expectations of consumers and small businesses,” Jim Chalmers said in a statement.
“We want to ensure that the transition to digital payments happens in a way that promotes greater competition, greater innovation and greater productivity across our economy.”
But in a submission to the federal government during the consultation process, Apple argued that the regulations would harm the emerging technology.
“Apple believes that the proposed expansion… will increase the regulatory burden with no net benefit to the public, give rise to… regulatory errors, and stifle the dynamic innovation that has characterized the Australian payments system in recent years. recent years,” Apple’s statement said.
The multinational technology company also argued that digital wallets were different from credit cards and therefore should not be subject to the same rules.
“Apple Pay can only work 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 if funds are available… By offering Apple Pay, Apple does not collect any information about the transaction.
However, some major banks, including ANZ, have come out in favor of the reforms.
“We support the government’s goal of expanding and modernizing payment system regulation,” the bank’s statement said.
“The proposed reforms would bring clarity and consistency to regulatory oversight of the payments system and the entities that play a role in the system.”
As part of the proposed changes, the definition of “payment” and “payment systems” will be updated to include new digital payment methods.
This would allow the Reserve Bank of Australia to regulate digital wallet providers, as it already does for credit cards.
A new ministerial power would also be introduced so that the minister can subject certain payment services to additional oversight from regulators if he or she believes the platform presents a risk of national significance.
The bill does not list considerations of national importance, as some have requested in their submissions to the consultation process.