Australian government will grant the RBA oversight of digital wallet providers

The Australian government recently made a decision to grant the country’s central bank, the Reserve Bank of Australia, regulatory oversight of digital wallet providers, such as Google and Apple.

The government came up with plans that show that it views these services as the same as any other payment methods and that all of them should fall under the RBA’s jurisdiction.

Australia to amend the Payment Systems Regulation Act 1998

The government has taken an interest in payment methods such as Apple Pay due to a recent rise in the use of mobile wallets in the country. As a consequence, the government has moved to add an amendment to its Payment Systems Regulation Act 1998 and effectively update the definition of “payment,” as well as “payment system,” to include modern technologies that were not available at the time when the original bill was passed.

The move highlights the country’s understanding of the evolution of payment methods and the need to have them regulated, just like traditional ones.

The move will ensure that the Reserve Bank of Australia will be allowed to regulate these providers and introduce a Ministerial designation power that would grant certain services or platforms to be subject to additional oversight as long as they present risks of national significance.

Simply put, since these payment methods can be misused and put the citizens at risk, the regulators will have to ensure that adequate protection measures are in place for the users’ protection.

Boosting competition, innovation, and productivity

Treasurer Jim Chalmers commented on the government’s new plans, saying that the goal is to make sure that the shift to digital payments will occur in such a way that it promotes greater competition, innovation, and productivity across the Australian economy.

At this time, the draft legislation was presented to the public, and it is currently open to public consultation, as Australia often wants to hear the citizens’ thoughts on the matter before moving on with a new law that will directly affect the population. However, the legislation will likely be introduced to the parliament before the end of the year.

The move is also a part of the country’s strategic payments plan, which will see the phasing out of cheques by the end of the decade, as they are considered to be too outdated and slow. Modern payment methods are much faster and often cheap enough for there to not be any noticeable difference. Further, Australia wishes to achieve a full transition to the New Payment Platform but also maintain access to cash and exploratory work on a potential CBDC later down the line.