Australian Government Prepares Makeover Of Payments Regulation

Two decades of rapid innovation have left Australia’s payments regulation out of step with the technologies reshaping how consumers and businesses transact. Now, the federal government is preparing a sweeping overhaul ushering in the most significant reform of payments law in a generation. Rooted in the Strategic Plan for Australia’s Payments System unveiled two years ago, the new regime seeks to ensure that Australia’s payments regulation includes modern payments technologies and functions such as digital wallets, stored-value facilities (SVFs), buy now, pay later (BNPL) tokens and stablecoins under a single, integrated regulatory framework. The objectives are clearer rules, stronger consumer protections and increased competition, which should lower costs. Key reforms The reforms are set to be introduced in two tranches. The first expands the range of licence-eligible providers. The Treasury plans to define new financial products such as SVFs, digital wallets and stablecoins under the payments licensing framework. It also aims to introduce more licensing obligations, exemptions and inclusions (termed Tranche 1B). The second aims to enhance the broader payments architecture. This