Due to rapid developments in the financial sector, particularly in the digital economy, Australia is considering legislation. This will allow the central bank to regulate digital wallet providers such as Apple Pay and Google Pay. In fact, these payment services are not currently considered payment systems. For this, they are therefore not subject to financial regulation in Australia. To justify this legislative initiative, the Australian government cites several aspects. These are broken down into three parameters: consumer protection, promotion of competition and encouragement of innovation. The initiative will make it possible to make up for the delay in payment infrastructure and the regulatory framework in the face of technological advances in the financial sector.
Remarkable increase in transactions via digital wallets
According to a report from the Australian Banking Association, the number of transactions carried out with mobile wallets is growing significantly. However, the transaction volume could reach 2.4 billion by 2022 compared to only 29.2 million in 2018. But this massive increase reveals the importance of a suitable regulatory framework for digital payment service providers.
Opposition from tech giants
However, this new legislation is not unanimous. Indeed, Google and Apple have expressed their disagreement over the designation of their platforms as payment systems. Additionally, both companies claim that their services simply facilitate transactions. These concern transactions carried out with cards issued by banks. For its part, Apple refuses to comment on this bill. In fact, the mark refers to a submission made earlier in the year. In this regard, it emphasizes that any reform must be proportionate given the limited role of digital services in the overall payment system.
The main consequences of this new regulation in Australia
If the proposed legislation is adopted, here are some potential impacts on the stakeholders involved:
- Increased consumer protection: the regulation of digital wallets will help strengthen the security and protection of users' personal and financial data. This exposes them less to the risk of fraud.
- Promoting fair competition: By forcing tech giants to follow the same rules as other players in the financial sector, smaller digital payment service providers can benefit from a more level playing field.
- Stimulated innovation: an appropriate regulatory framework can encourage the emergence of new solutions and technologies in the field of digital payment. This thus contributes to the overall growth of the sector.
The challenges of effective regulation of digital wallets in Australia
To achieve constructive and beneficial regulation for all stakeholders, it is essential to take into account several aspects:
- Adaptability: legislation must be able to quickly adapt to technological developments and new trends in the digital payment industry.
- International cooperation: given the cross-border nature of digital transactions, coordination with other countries and international organizations is essential to harmonize regulations and prevent abuse.
- Taking into account the specificities of the players: regulation must take into account the differences between the services offered by the various digital wallet providers and adapt the requirements accordingly.
In short, Australia demonstrates its commitment to keeping up with the rapidly changing financial landscape. The country unveils this bill aimed at regulating digital payment providers. Indeed, this approach could have repercussions on consumer protection, competition and innovation in the sector. However, it remains to be seen whether this bill will succeed in meeting the expectations of the various stakeholders concerned.
