Last Updated on 22/11/2021 by Sanskriti
The Australian government is proposing new legislation to enhance oversight of businesses like Apple and Alphabet’s Google digital payment systems.
Treasurer Josh Frydenberg said he’d “carefully examine” that and other recommendations from a government-commissioned study into whether the payments system has kept up with technology developments and shifts in consumer demand.
Google Pay, China’s WeChat Pay, and Apple Pay which have exploded in popularity in recent years are not officially classified as payment systems, leaving them outside the legal framework.
In an editorial piece published in the Australian Financial Review, Frydenberg stated, “Ultimately, if we do nothing to reform the current framework, it will be Silicon Valley alone that determines the future of our payments system, a critical piece of our economic infrastructure.”
The Bank for International Settlements (BIS) issued a statement earlier this month urging global financial regulators to address the rising power of ‘Big Tech,’ as well as the vast amounts of data owned by companies like Google, Facebook, Amazon, and Alibaba.
The government should be granted the ability to designate tech companies as payment providers, according to an Australian paper, which clarifies the legislative position of digital wallets.
It also suggested that the government and industry work together to produce a strategic plan for the payments ecosystem as a whole, as well as a single, integrated licensing structure for payment systems.
Payments using digital wallets grew to 8% of in-person card transactions in 2019, up from 2% in 2016, according to the Reserve Bank of Australia (RBA), which is presently in charge of determining who is a payment services provider.
The Commonwealth Bank of Australia has asked authorities to address “competition issues” and evaluate the safety implications of their usage, estimating that digital wallet transactions increased by more than twice in the year to March to AUD 2.1 billion (approximately Rs. 11,270 crores).