ASIC has indefinitely extended ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211 which gives relief for travellers’ cheques, loyalty schemes, road toll facilities, low-value facilities, gift facilities and prepaid mobile payment facilities from certain Corporations Act requirements for financial products.
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 (Amendment) Instrument 2018/752 amends ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211 by removing the March 2019 sunset date.
Although the final report of the 2014 Financial System Inquiry recommended that the Government enhance graduation of retail payments regulation by clarifying thresholds for regulation by ASIC and the Australian Prudential Regulation Authority, strengthen consumer protection by mandating the ePayments Code and introduce a separate prudential regime with two tiers for purchased payment facilities, the Government has still not determined its position.
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.