Following a consultation process in June of this year, Treasury has released exposure draft legislation to update the Payment Systems (Regulation) Act 1998 (Cth) (PSRA Act). 

Summary of the proposed changes

The Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023: Amendments of the Payment Systems (Regulation) Act 1998 (Bill) proposes a number of changes to ‘modernise’ the regulation of payment systems in Australia by amending the framework to enable the RBA and/or the Government to regulate new payment methods that are widely used today, as well as those that may emerge in the future. 

Notably, the Bill:

• broadens the definition of ‘payment system’ to cover a broader set of payment arrangements (including those involving digital assets) and to include arrangements that facilitate a payment being made;
• broadens the definition of ‘participant’ to capture a greater number of entities involved in the payment chain, including those who play a role in facilitating or enabling payments to be made through a payment system;
• grants the Minister the power to designate a payments system as a ‘special designated payment system’ and subject it to the PSRA Act if it is considered it is in the national interest to do so – noting that the RBA has a similar power to designate a payment system if it is in the public interest to do so (which will remain);
• grants the Minister the power to nominate a regulator to perform regulatory powers and functions in relation to a payment system it designates, including the imposition of an access regime, specific standards or directions on participants;
• grants the RBA the power to enter into court enforceable undertakings with a participant in relation to a breach of the PSRA Act; and
• repeals the existing offence provisions in the PSRA Act and replaces them new provisions covering both criminal and civil penalties, with an increased maximum penalty for various offence provisions.   

Next steps 

We are reviewing the proposals closely with a view to publishing a more detailed alert capturing our insights on the Bill, how it will impact industry once implemented and what this may mean for the future of payment systems regulation in Australia. 

Consultation on the exposure draft legislation closes on 1 November 2023.  Please do not hesitate to contact us if you have any queries about the draft legislation or require assistance making a submission.  

Further update: You can find a more detailed analysis and discussion of the proposed changes here: Ministerial muscle - Australian government to strong arm payment systems regulation