Digital wallets like Google Pay and Apple Pay would be regulated under draft laws released by the federal government.
An attempt to modernise Australia’s payments system is expected to hit parliament this year so digital wallets would face the same regulations as credit cards and EFTPOS transactions.
Treasurer Jim Chalmers flagged the changes in a speech to the Australian Banking Association, stating new powers were needed to respond to emerging challenges.
Apple representatives told a parliamentary inquiry earlier this month digital wallets were the safest way to pay and more secure than physical cards.
Dr Chalmers said the changes would make Australia’s system flexible enough to meet economic needs into the future.
“As payments increasingly become digital, our payments system needs to remain fit for purpose so that it delivers for consumers and small businesses,” he said in a statement.
“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.”
The laws would let the Reserve Bank of Australia regulate emerging payment systems and address any risks posed to consumers.
The relevant minister could add any new payment system to the list requiring regulation.
Digital wallet payments were 35 per cent of card transactions in the June quarter, spiking from 10 per cent in 2020.
Nearly two-thirds of Australians aged between 18 and 29 use mobile payments.
At a parliamentary inquiry last week, Apple’s Kyle Andeer said his organisation had no idea what a consumer was buying when they use their digital wallet service.
“It is not a financial services product, all it is is a digital reproduction of your physical card – you can’t actually use Apple Pay without actually having a physical credit card from a bank,” he said.
“That experience is much more secure, much more private than the physical card you may be carrying around in your wallet.”
(Australian Associated Press)