The Australian government has released for consultation an exposure draft of amendments to the Payment Systems (Regulation) Act 1998 (PSRA) to ensure the regulation of new risks related to payments as the digital provision of payments evolves and increases in complexity. Background.
If passed, the Bill expands the regulatory coverage of the PSRA by updating key definitions to ensure all entities that play a role in facilitating or enabling payments, including new entrants, are appropriately regulated.
The Bill expands the definitions of “payment system” and “participant” to ensure the Reserve Bank of Australia has the ability to regulate new and emerging payment systems, such as digital wallet providers and Buy Now Pay Later service providers.
Payment system is broadly defined to:
(a) mean an arrangement or series of arrangements under which transfers of funds are made; and
(b) include any instruments and procedures that relate to that arrangement or series of arrangements.
The new definition of ‘payment system’ covers a broader set of arrangements, including payment systems that use non-monetary digital assets for payments or provide services that facilitate a payment being
made, and ‘three party’ or ‘closed loop’ systems.
The new definition of ‘participant’ captures all entities involved in the payments value chain, including entities with or without a direct relationship to a payment system.
“Funds” will include, but are not limited to, money and digital units of value, including digital currency.
A new ministerial designation power will allow particular payment services or platforms that present risks of national significance to be subject to additional oversight by appropriate regulators.
The Bill modernises the penalty regime in the PSRA by introducing civil penalty provisions and enforceable undertakings and increasing existing maximum criminal penalties.
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Author: David Jacobson
Principal, Bright Corporate Law
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.