The government has issued a consultation paper on a licensing framework for payment service providers (PSPs). The proposed reforms will provide consistent regulation based on the activity a payment service provider performs. Background.

Licensing

The following payment functions are proposed to be regulated:
• Stored-value facilities (‘traditional SVFs’)
• Payment stablecoins (‘payment stablecoin SVFs’)
• Payment instruments
• Payment initiation services
• Payment facilitation services
• Payment technology and enablement services
• Cross-border transfer services

Payment service providers (PSPs) undertaking one or more of these functions will need to obtain an Australian Financial Services Licence (AFSL). Some PSPs will be subject to additional APRA regulation.

Payment stablecoins are proposed to be regulated under the SVF framework as they offer
features that are functionally similar to fiat currency held in traditional SVFs

Access to the payments system

Common access requirements (CARs) will provide a pathway for non-bank PSPs to gain
direct access to Australian payment systems to clear and settle payments, promoting more competition in payments. APRA would be responsible for setting and supervising the CARs.

mandatory ePayments Code

The Government will introduce a mandatory ePayments Code, to replace the existing voluntary Code. This will include consumer protection for unauthorised transactions and mistaken payments.

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