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<p>The Australian <a href="https://en.wikipedia.org/wiki/Australia" rel="noopener noreferrer nofollow" target="_blank">government</a> announced its intention on Wednesday to introduce legislation that would grant the central bank the authority to regulate digital wallet providers, a move that could affect services like Apple Pay and Google Pay. Currently, Apple Pay, Google Pay, and China’s WeChat Pay, despite their rapid growth in recent years, are not officially designated as payment systems in Australia. This has placed them outside the scope of Australia’s financial regulatory framework.</p>
<h2 class="wp-block-heading" id="reserve-bank-of-australia-set-to-oversee-digital-payments">Reserve Bank of Australia set to oversee digital payments</h2>
<p>The proposed rules would empower the Reserve Bank of Australia (RBA) to oversee digital wallet payments much like it does with credit card networks and other financial transactions. Additionally, it would grant the treasurer the authority to instruct regulators to assess any potential risks posed by payment platforms to the country. Treasurer Jim Chalmers stated that the government is actively trying to address the risk that digital payment services pose.</p>
<p>According to treasury documents, the draft legislation would expand the definitions of “payment system” and “participant” within Australia’s existing laws. Australia’s payment infrastructure and regulatory framework have faced challenges in keeping pace with the rapid changes in the financial sector, particularly in the country’s burgeoning digital economy and payment methods. A June report from the Australian Banking Association highlighted a significant shift in payment preferences in recent years.</p>
<p>Mobile wallet transactions in the country surged from 29.2 million in 2018 to 2.4 billion in 2022. Google and Apple have expressed their opposition to the government’s move to categorize them as payment providers. They argue that customers use their smartphones to make payments with cards issued by banks. Apple chose not to comment on the draft legislation but referred to a submission it made to the treasury in July. In that submission, Apple contended that any reforms should be proportionate to the limited, indirect role that digital services play in the payment system.</p>
<h2 class="wp-block-heading" id="implications-of-the-law-on-digital-service-providers">Implications of the law on digital service providers</h2>
<p>The government has invited feedback from various stakeholders on the draft legislation until November 1. It is anticipated that the legislation will be presented to parliament later this year. The Australian government has unveiled plans to introduce new laws aimed at giving the country’s central bank, the Reserve Bank of Australia (RBA), the authority to regulate digital wallet providers, which could affect major services like Apple Pay and Google Pay. As it stands, digital wallet services offered by companies such as Apple, Google, and WeChat Pay from China are not classified as payment systems within Australia’s financial regulatory framework.</p>
<p>This new legislation would change that, effectively bringing these platforms under the RBA’s regulatory purview. Under the proposed rules, the RBA would be empowered to oversee digital wallet payments like credit card networks and other forms of financial transactions. Additionally, the legislation would grant the treasurer the ability to direct regulators to assess and address potential risks posed by payment platforms to the country’s financial system. Treasurer Jim Chalmers underscored the government’s focus on mitigating risks associated with unregulated digital payment services while simultaneously promoting competition and innovation.</p>
<p>In particular, the government aims to protect consumers in an evolving <a href="https://www.cryptopolitan.com/introducing-the-future-of-financial-transactions-caiz-and-caizcoin-break-new-ground-in-international-finance/" data-type="post" data-id="379580" rel="noopener noreferrer nofollow">financial</a> landscape. The draft legislation would redefine the concepts of a “payment system” and a “participant” as outlined in Australia’s existing financial laws, marking a significant expansion of the regulatory framework to address the evolving digital payment landscape. This move comes as a response to the dynamic changes in payment preferences witnessed in Australia. A recent report showed a shift in payment behavior, with the number of mobile wallet transactions surging from 29.2 million in 2018 to a staggering 2.4 billion in 2022.</p>

Australia announce plans to regulate digital service providers

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