Australia to regulate new digital wallets

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Australia to regulate new digital wallets

The federal government will soon require Apple and Google to comply with the same rules as credit cards and EFTPOS transactions to better protect consumers.

Australians are increasingly using digital wallets, such as Apple and Google Pay, which can be loaded onto a smartphone to pay for goods and services.

About 35 percent of card transactions in the June quarter were made using digital wallets, compared to 10 percent in early 2020.

There are almost two-thirds of people aged 18 and 29 using digital payment systems on mobile phones, and the number of people over 65 using digital wallets has also doubled since 2019.

Chalmers has said that new payment systems, such as digital wallets, should be regulated in the same way as credit cards, EFTPOS and other transactions.

The regulations would ensure more transparency in the costs paid to consumers and businesses and would not impact how consumers use the digital payment services.

The treasurer, who has released a draft legislation to reform the Payment Systems Act, said it would protect consumers, promote competition and spur innovation.

Jim Chalmers, a former chief executive of the State Department, said on the condition of anonymity.

In a response to the federal government during the consultation process, Apple argued the regulation would harm the emerging technology.

Apple said in a statement that its payment system has been working well over the past few years.

The multinational tech firm also argued that digital wallets were different to credit cards and therefore should not have to follow the same rules.

Some big banks, including ANZ, were in favor of the reforms.

The aim of the bank's statement is to broaden and modernise the regulation of the payments system.

Under the proposed amendments, the definition of 'payments systems' and 'payments systems' will be updated to include new digital payment methods.

The Reserve Bank of Australia would be able to regulate digital wallet providers like it does with credit cards.

A new ministerial authority would be introduced so that the minister can subject certain payment services to additional oversight by regulators if he or she feels the platform presents a risk of national significance.

As asked by some in their submittals to the Consultative Consultative process, the draft legislation doesn't list what the national significance considerations are.