The Albanese Government is taking steps to regulate digital payment wallets, like Google Pay and Apple Pay, in the same way other payment methods are managed.
But it’s also the next step in the phasing out of cheque payments, as flagged by Treasurer Jim Chalmers in a speech in June.
The draft legislation, announced on Tuesday, would allow the Reserve Bank (RBA) to regulate new and emerging digital payment services, which the Federal government claims will “protect consumers, promote competition, and spur innovation.”
“As payments increasingly become digital, our payments system needs to remain fit for purpose so that it delivers for consumers and small businesses,” Dr Chalmers said.
“We want to make sure the shift to digital payments occurs in a way that promotes greater competition, innovation and productivity across our entire economy.”
Public consultation for amendments to the Payment Systems (Regulation) Act 1998 opens on Wednesday, which aims to update the definition of ‘payment’ and ‘payments systems’ to capture new payment methods that are widely used today, and into the future.
Speaking in June, Dr Chalmers said cheque payments will be wound-down to 2028, with legislative requirements for their use scrapped by 2030.
“Currently, 98 per cent of retail cheques could be serviced through internet or mobile banking and 100 per cent of those used in institutional and commercial settings,” Dr Chalmers said.
“Leaving cheques in the system is an increasingly costly way of servicing a declining fraction of payments.”
Government figures show 35 per cent of total card transactions in the June quarter 2023 were made with digital wallets, up from 10 per cent in early 2020.
While RBA figures show nearly two-thirds of younger Australians aged between 18 and 29 use mobile payments — up from less than 20 per cent in 2019.
About nine per cent of Aussies 65 and over regularly make mobile payments, triple the amount in 2019.