BIG CHANGE AHEAD WITH PM’S PAYMENTS REFORM AGENDA

From payday super, to cash mandates, new payment system designations and a possible ban on debit card surcharging, the new-look Albanese government has a big payments reform agenda that could kick off almost immediately parliament resumes.

By Warwick Ponder, Managing Editor

Proposed reforms to the Payment Systems (Regulation) Act 1998 are likely to hit parliament quickly, providing the Treasurer the power to designate payments systems for regulation – possibly including fintechs and big platforms like the New Payments Platform (NPP), Apple, PayPal, AMEX and Google, Square and Stripe.

These powers may also enable the Reserve Bank of Australia (RBA) and the ACCC to take action on issues such as blended debit and credit card fees, which they claim are currently beyond their powers.

In October 2023, Treasurer Jim Chalmers announced the Bill “is addressing the risks posed by new digital payment services, which are currently unregulated, to protect consumers, promote competition and spur innovation”.

The big banks are keen to see this legislation passed, with the Australian Banking Association saying it “will ensure Australia’s payments regulatory framework remains fit-for-purpose as digital payments continue to skyrocket”.

“This legislation will give the RBA powers to regulate all players within the payments system including Apple and Google, to ensure it is fair and safe for all customers,” the ABA said.

Payday super legislation will also come quickly, requiring employers to pay their employees’ super at the same time as their salary and wages from 1 July 2026, and become heavily reliant on the New Payments Platform . Submissions on the proposed legislation closed last month.

The Government will also be watching progress on the RBA’s inquiry into merchant fees and surcharging, after promising to lower small business card fees and ban debit surcharging on 1 January 2026 if the RBA doesn’t get the job done.

We will quickly see progress on the government’s proposed cash mandate which is also proposed to kick in on 1 January 2026.

This will require businesses to accept cash as payment for groceries, fuel and other essentials.

While it has already flagged an exemption for some small businesses it is not clear what that looks like.

The Government is under significant pressure to ensure this legislation also deals with issues such as the long‑term and sustainable distribution of cash, and enabling adequate access to cash services throughout Australia, including regional and rural areas where the big banks have closed 800 branches since 2017.

In the next few months, Federal Treasury is expected to clarify the government’s expectations around the timing of the BECS closure, with the release of findings of a consultation with industry participants on the future of bulk payments processing.

Given the recent findings of the RBA’s Decommissioning of the Bulk Electronic Clearing System: RBA Risk Assessment, and the government’s reliance on BECS to deliver critical services such as public service wages, pensions, disability payments and Centrelink payments, it may choose to move the current 2030 closure date set by AusPayNet well down the track.

Then there’s the development of “a fit for purpose digital asset regulatory regime, to build a more dynamic and competitive economy”.

In March it released a Statement on Developing an Innovative Australian Digital Asset Industry to provide clarity and certainty to the digital assets sector.

“We want to seize these opportunities and encourage innovation at the same time as making sure Australians can use and invest in digital assets safely and securely with appropriate regulation,” the government said at the time.

If that’s not enough, we are also likely to see a lot of action on issues like AI, innovation and digital identity.

In the payments space, a lot will hinge on who the Prime Minister picks as his new Minister for Financial Services following the retirement of Stephen Jones.

Buckle up. It’s going to be an exciting ride for the payments industry over the coming months, so watch this space.

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