The government has knocked back the recommendation of the Payment System Review that it establish a payments industry convenor, saying it plans to enhance Treasury’s payments expertise and handle strategic planning for the sector internally.
Following Treasurer Josh Frydenberg’s speech on Wednesday outlining reforms to regulation of the payments system, Treasury has released the government’s responses to the review it commissioned from lawyer Scott Farrell, as well as to reports from the Senate Committee on Australia as a Financial and Technology Centre, chaired by Andrew Bragg, and the Parliamentary Joint Committee on Corporations and Financial Services, which reported on mobile payments and digital wallets.
Of the 14 recommendations Farrell made, the government has agreed to all but one.
Of the 12 recommendations made by Bragg’s committee, the government agreed to only one – that in accordance with the Farrell review common access requirements for the New Payments Platform should be developed by the Reserve Bank to reduce the reliance of payments businesses on the major banks for the provision of banking services.
It agreed in principle with five others, noted three others and disagreed with a recommendation that business undertaking digital asset mining in Australia receive a tax discount if they source renewable energy for their activities.
It agreed with or noted all 14 of the Corporations and Financial Services Committee recommendations
Frydenberg referred to a several of the Farrell recommendations in his speech. These include developing a strategic plan for payments, giving the Treasurer an enhanced leadership role on payments issues, enhancing Treasury’s payments policy function, and expanding the definition of payments covered by regulation.
Other Farrell review recommendations the government has accepted include introducing a single- tiered payments licensing framework in line with a list of payment functions. Applicants would apply for licences solely from ASIC, which would co-ordinate with other regulators.
And the government has agreed with recommendations to mandate the ePayments Code for payments licensees, and to develop business and consumer education programs in relation to payments to ensure they understand their choices.
The Bragg committee made two recommendations in relation to de-banking: that a scheme to address the due diligence requirements of banks be put in place; and that businesses that have been de-banked be given access to a review process run by the Australian Financial Complaints Authority.
The government noted the recommendations and said it would ask the Council of Financial Regulators to consider the underlying causes and possible policy response to de-banking.
Many of the Corporations and Financial Services Committee’s recommendation were along similar lines to Farrell’s, calling for enhanced Treasury capacity in payments policy.
One recommendation noted by the government was that that Australian Payments Network provide information to regulators on non-compliance by its members. The government said it would consult on the issue.