The Australian government will consider new laws that could bring in regulation of digital payments services. Tech giants who offer services such as Apple Pay, Google Pay and WeChat Pay have not only expanded their operations but still remain outside the regulatory system. Australia wishes to correct this anomaly in its country as well as globally.
An Australian government commissioned report recommended that the government should designate tech companies as payment providers. This would bring them within the regulatory system. It also suggested that both governments and industry combine together to set forth a strategic plan that would expand the payments ecosystem.
The report recommended that it would be feasible to develop a single integrated licensing framework that would encompass all types of payments including digital wallets.
The Associated Press reported that Treasurer Josh Frydenberg mentioned that he would “carefully consider” recommendations that were put forth in the government commissioned report which explored whether payments systems were abreast with technological advances and evolving consumer demands.
In an opinion piece that was published in the Australian Financial Review newspaper Frydenberg noted that that ultimately, if the government did not reform its existing framework, Silicon Valley would be the sole determinant of the future of all payment systems, which were a critical piece of a country’s economic infrastructure.
The Reserve Bank of Australia (RBA) noted that digital wallet payments had increased in 2019 of in-person card transactions by eight percent when compared to two percent in 2016. The Commonwealth Bank of Australia asked regulators to address “competition issues” and to consider safety implications as digital wallet transactions had doubled in the year to March and were at A$2.1 billion.
Earlier in August, the Bank for International Settlements (BIS) had asked global financial watchdogs to consider the implications of the data that is controlled by Big Tech groups. This data gives companies such as Google, Facebook, Alibaba, and Amazon a huge amount of financial control. Many people are migrating to digital wallets developed by Big Tech for payments and these wallets are currently under no regulatory purview.