Australia mulls new regulations for Apple, Google, WeChat wallets

T

he Australian government is reportedly planning to introduce new regulations for digital payment services by major tech companies such as Apple and Google. Digital wallets such as Apple Pay, Google Pay and WeChat Pay are not currently designated payment systems in Australia.

Australian federal treasurer Josh Frydenberg said he would "carefully consider" recommendations from a government-commissioned report to analyse if the payments system has been in line with advances in technology and changes in consumer demand, Reuters reported. The report suggested that the government be given the authority to designate tech companies as payment providers, and to define the regulatory status of digital wallets.

The report also recommended that the government and industry work together to form a strategic plan for the wider payments ecosystem. It also stated that a single, integrated licensing framework for payment systems should be developed as part of the collaboration.

In an opinion piece published in the Australian Financial Review newspaper, Frydenberg said: “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.”

Currently, the Reserve Bank of Australia holds the power to designate payment services provider. According to the bank, payments through digital wallets increased to 8% of in-person card transactions in 2019, up from 2% three years ago.

The Commonwealth Bank of Australia urged regulators to address "competition issues" after it observed that digital wallet transactions more than doubled to A$2.1bn ($1.6bn) this year through the month of March.

Citi Australia recently announced plans to enter the buy now pay later space with the launch of its new offering, Spot.