Despite the technological advances in the last 10 years, ASIC’s last guidance on non-cash payment facilities was published in Regulatory Guide 185 in 2005.

ASIC has now updated RG185 and published ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211 which extends relief for travellers’ cheques, loyalty schemes, road toll facilities, low value facilities, gift facilities and prepaid mobile payment facilities.

The Corporations Act provides that a non-cash payment facility through which, or through the acquisition of which, a person makes payments otherwise than through the delivery of notes or coins is a financial product which requires persons to:

• hold an Australian financial services (AFS) licence in order to provide financial services in relation to the non-cash payment facility;
• comply with the conduct obligations in Part 7.8 of the Act; and
• provide Product Disclosure Statements and confirmations of transactions to retail clients.

ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211 preserves the effect of [CO 02/1075], [CO 03/705], [CO 05/736], [CO 05/737], [CO 05/738], [CO 05/739] and [CO 05/740] for three years while the Government considers the Financial System Inquiry’s recommendations that the regulation of payments products be clarified.

ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211 provides relief for the following types of non-cash payment products:

• travellers’ cheques, which are exempt from the requirement to provide confirmation of transaction under the Corporations Act;
• loyalty schemes and road toll facilities, which are not subject to the financial services laws in the Corporations Act;
• prepaid mobile facilities and some non-reloadable gift facilities, which are exempt from the licensing, conduct and disclosure obligations in the Corporations Act;
• low value payments products, which are exempt from the licensing, conduct and disclosure obligations in the Corporations Act but subject to alternative disclosure and dispute resolution obligations.

The ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211 also exempts financial services licensees from the need to hold a payment product authorisation in order to advise their clients on, and arrange for their clients to deal in, conventional payments products they may use to pay third parties for goods and services.