The Australian Treasury has released a consultation paper seeking input from industry stakeholders into the Payments System Strategic Plan.
Currently, Australia’s payment system has expanded in both size and complexity. As such, business models and participants require increased transaction convenience and more payment methods going into the future. The consultation paper refers to four key emerging payment trends as the backdrop for future reform. This includes:
- Updated payment methods – Australia continues to migrate away from physical cash to prefer electronic payments, with an increasing preference for debit cards over credit cards in retail payment
- Modern technology – new tech is revolutionising payment systems. The New Payments Platform (launched in 2018) now processes over 25% of total account to account payments
- New providers and business models – new business models and participants are challenging the traditional definition of payments
- New risks – new risk profiles associated with emerging payment technology are attracting greater industry and regulator focus
The Australian Government recognises that regulatory reform is required to reflect the changing landscape. To achieve this, the government will pursue payments system reforms to ensure our regulatory framework is fit-for-purpose now and in the future. This reform agenda includes (but is not limited to):
- Developing a Strategic Plan for the payments system in collaboration with regulators, industry, consumer, and business representatives
- Updating the Payment Systems (Regulation) Act 1998 to capture the full suite of payment entities and systems, as well as provide the Treasurer with ministerial powers to address payment issues outside the scope of the Reserve Bank of Australia’s (RBA) public interest powers
- Implementing a tiered licensing framework for payment service providers
- Reducing small business transaction costs, particularly through least cost routing, or a similar solution
- Continuing development of international interoperability through cross-border initiatives, and
- Considering developments in the broader digital economy that are related to payments, such as digital wallets, buy-now-pay-later arrangements, stablecoins, crypto-assets, central bank digital currencies (CBDCs), the consumer data right (CDR), and connecting with payment-related initiatives underway across the country (eg. state-based initiatives).
The consultation paper also sets out a series of questions and considerations and invites industry stakeholders to comment on these questions and considerations until 6 February 2023.
For a full reading of the consultation paper, see here.
