Australia wants to regulate Apple and Google Pay, and digital wallets like it does credit cards

The Reserve Bank of Australia (RBA) would be given expanded regulatory powers over bring digital wallets, buy-now-pay-later (BNPL) companies, and crypto assets under proposed reforms to national payments systems legislation published this week.

In a statement, Treasurer Jim Chalmers said the reforms “[address] the risks posed by new digital payments services, which are currently unregulated, to protect consumers, promote competition and spur innovation”.

Proposed changes to the Payments Systems (Regulation) Act 1998 would expand the definitions of what is classed as a payments system to incorporate new technologies.

The new rules would also give the Treasurer powers to further designate payments platforms in the “national interest”.

Protecting the stability of the financial system, maintaining consumer privacy and data safety, and ensuring competition are among the stated aims of the reform work which follows a review of payments system legislation that was handed down in 2021.

That review warned that digital wallets – like Apple Pay, Google Pay, and WeChat – might become “systemically important” as adoption increases.

Yet despite their potential importance for Australia’s economy, the review said, “digital wallets are not designated as a payment system or required by regulation to meet any standards around availability or accessibility”.

“Moreover,” the review continued, “digital wallets provide a rich source of transaction data for wallet providers.

“Consideration should be given to the appropriate storage, collection and use of that data.”

Folding digital wallets into the RBA’s regulatory framework would give the bank the ability to arbitrate disputes and decide on standards and access regimes wallet providers would have to use.

In its submission to a consultation paper about the reforms earlier this year, Apple tried to talk down its role in the payments ecosystem.

“Apple Pay is a method through which consumers can use their existing debit, credit or prepaid cards to make payments from Apple devices in an easy, safe, secure and private way,” the company said.

“Any regulations that are proposed to apply to ‘all entities involved in the payments value chain’ should therefore be tailored to reflect Apple’s (and other digital wallet providers’) limited and indirect role in the payment process, and the absence of any financial or misconduct risks to which Apple services can conceivably give rise.”

Submissions to the proposed payments system reforms are open until 1 November 2023.