The Australian Government has released its Strategic Plan which sets out its policy objectives and priorities for the future of Australia’s payments system.

Its plan and timetable are summarised in this chart (click on the image to enlarge):

The Plan’s Key priorities and supporting initiatives are:
1) Promoting a safe and resilient system
• Reducing the prevalence of scams and fraud
• Strengthening defences against cyber-attacks
•Supervising systematically important payment systems

2) Updating the payments regulatory framework
• Implementing changes to the Payment Systems (Regulation) Act (PSRA)
• Establishing a new payments licensing framework
• Promoting competition by facilitating transparent access to payment systems
• Enabling greater collaboration between payment system regulators
• Reducing small business transaction costs

3) Modernising payments infrastructure
• Phasing out cheques
• Upgrading systems
• Maintaining access to cash

4) Uplifting competition, productivity, and innovation across the economy
• Aligning payments system objectives and the Consumer Data Right (CDR) framework
• Supporting the broader use of Digital ID
• Uplifting digital and technological skills
• Building public trust and confidence and supporting the adoption of AI

5) Australia as a leader in the global payments landscape
• Creating a regulatory environment that attracts and enables innovation
• Facilitating cross-border payments
• Exploring the policy rationale for a central bank digital currency (CBDC) in Australia

Phasing out cheques and the Bulk Electronic Clearing System

The Treasurer gave a speech highlighting the replacement of the Bulk Electronic Clearing System and the transition of domestic direct entry electronic payments to the New Payments Platform.

He said the cheque system in Australia will wind down no later than 2030.

The Government has announced it will remove legislative and other requirements that require the use and acceptance of cheques by the end of 2028.

Licensing of payment service providers — payment functions

The Government is consulting on a list of payment functions that is intended to underpin a new licensing framework for payment service providers.

The new framework is intended to ensure consistent and appropriate risk-based regulation of payment service providers based on the payment functions they provide.

The list focuses on stored-value facilities and payment facilitation services.

Reforms to the Payment Systems (Regulation) Act 1998

The Government proposes changes to the Payments Systems (Regulation) Act 1998 (PSRA) to ensure regulators and the Government can address new risks related to payments as the provision of payments evolves and increases in complexity.

The proposals include:

• Updating the PSRA to ensure the Reserve Bank of Australia has the ability to regulate new and emerging payment systems, such as digital wallet providers.
• Introducing a new ministerial designation power that would allow particular payment services or platforms that present risks of national significance to be subject to additional oversight by appropriate regulators.

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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.