Specifically, the Australian government announced plans on Monday to include digital payment services such as Apple Pay, Google Pay, and others within the regulatory framework that currently governs credit cards and traditional payment methods. This initiative, which is scheduled for introduction to parliament, responds to the increasing popularity of digital wallets, including those offered by Apple, Google, and Tencent's WeChat, which operate outside the scope of existing Australian payments legislation at the time of writing according to Yahoo.
The impending legislation, previously hinted at in October 2023, aims to extend the regulatory authority of the Reserve Bank of Australia to encompass new and emerging payment technologies. Representatives from the Australian government emphasised the need for modernising the country's payments system to align with current economic demands and future trends. The main objective of this endeavour is to facilitate the growth of digital payments in a manner that supports competition, innovation, and productivity throughout the economy.
Expected to be introduced on 29 or 30 November 2023, the legislation reflects regulators' response to the substantial rise in digital wallet usage, particularly among the younger demographic. In the June 2023 quarter, Yahoo reported that transactions from digital wallets constituted 35% of all card transactions, a significant increase from the 10% recorded in early 2020. It's also worth noting that two-thirds of Australians aged 18 to 29 now rely on mobile payments, compared to less than 20% before the onset of the pandemic.
Alongside the broader regulatory scope, the proposed amendments grant relevant ministers the authority to subject a particular payment system or platform to special oversight, specifically if it poses a risk of 'national significance.' This move aligns with the government's goal of adapting to the evolving landscape of digital payments while ensuring appropriate regulatory measures are in place to address potential risks.
According to Statista, Australia has undergone a notable shift towards a cashless society in recent years. Less than ten years ago, cash held a predominant role in consumer transactions. However, the landscape has evolved, leading to a significant decline in cash withdrawals, primarily attributed to the widespread adoption of digital payment methods. In addition to conventional debit and credit cards, newer alternatives, including digital wallets and mobile payments, are steadily gaining market share.
The acceleration of this trend was particularly pronounced during the COVID-19 pandemic. The global health crisis served as a catalyst, supporting increased acceptance and utilisation of digital payment technologies. In response to changing consumer behaviours, businesses are adjusting their practices to accommodate non-contact payment methods all over the world, including Australia.
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