Payments Systems Set for New RBA Regulations
(31 May 2022 – Australia) Reserve Bank of Australia (RBA) deputy governor Michele Bullock views Australia's regulatory framework for payments as “no longer fit for purpose” as non-bank challenger brands increasingly emerge as a major disruptive force.
The entry of buy now, pay later (BNPL) companies, smartphone-based services and cross-border payment companies into Australia's payment system is accelerating the need for change. The RBA is seeking to ensure new entrants into the payments system do not have an unfair advantage over incumbent banks managing costly legacy system because they are not being regulated.
The federal government is also planning to release guidance to the payments industry in regards to how legacy payment infrastructure should be wound down in reference to decline cheque and direct entry payment system volumes.
"Currently many of these non-bank participants, they play a key role in the payment system but they're not actually captured by our regulatory powers. Gateways, mobile wallet providers and payment facilitators do not hold deposits but they play a critical role in ensuring that payments are safe, secure and efficient. A facilitator of cross-border payments might be a bank, but it might not be a bank " Bullock stated.
“Crypto is disruptive but still too small to threaten the traditional financial system. Most cryptocurrencies originate outside Australia, so international co-operation will be needed to regulate it properly” Bullock added.