The Australian Banking Association (ABA) has expressed strong support following the passage of the Payments System Modernisation Bill through the House of Representatives. This legislation aims to update Australia’s payments regulatory framework, bringing it in line with modern technology and practices. The ABA is now urging the Senate to expedite the bill’s passage to ensure timely implementation of these critical reforms.
The proposed legislation seeks to include digital wallets, cash distribution services, buy now, pay later schemes, and other emerging payment methods under regulatory oversight. This development is expected to significantly enhance protections for consumers engaging in a rapidly evolving digital economy.
Simon Birmingham, CEO of the ABA, welcomed the advancement of this legislation, highlighting its importance in modernising the existing payment rules. “Australians made around $160 billion in payments using mobile wallets last year alone, yet our payments rules have not had a significant refresh in more than 25 years,” Mr Birmingham stated. He emphasised that the existing laws must evolve to reflect the contemporary landscape of consumer payments.
Modernising Payment Regulations
Birmingham pointed out that current payment system laws are outdated, originating from an era dominated by cheques, swipe cards, and dial-up internet. “It’s time they reflect the dramatic shift in the way consumers make payments,” he asserted. With the surge in the use of digital wallets for everyday transactions, the necessity for updated regulations has become increasingly clear.
Under the proposed reforms, technology giants offering mobile wallet services will be required to adhere to the same standards as traditional banks and other regulated payment services. This initiative is aimed at ensuring consistent rules across all payment providers, thereby enhancing consumer protection.
“The explosion of digital wallets in everyday transactions means regulation must catch up. Consumers should have the same protections whether they tap their bank card or their mobile phone,” Birmingham added.
The ABA has urged the Senate to prioritise the swift passage of the Payments System Modernisation Bill, ensuring that Australia’s payments system regulation aligns with the realities of the digital economy. The proposed reforms are encapsulated within the Treasury Laws Amendment (Payments System Modernisation) Bill 2025, which represents a significant step forward in adapting Australia’s financial landscape to modern needs.
As discussions move forward in Parliament, the outcome of this legislation could have lasting implications for consumers and businesses alike, paving the way for a more secure and efficient payment environment in Australia.
