Over the last year, Australia has been tightening its laws to regulate Big Techs. Now, the government is considering new laws to regulate digital payment services like Apple Pay.
According to a report by Reuters, Australian treasurer Josh Frydenberg said “he would ‘carefully consider’ that and other recommendations from a government-commissioned report into whether the payments system had kept pace with advances in technology and changes in consumer demand.”
The Australian report recommends the government be given the power to designate tech companies as payment providers and to establish a strategic plan between government and industry for an integrated licensing framework for payments systems to be developed.
“Ultimately, if we do nothing to reform the current framework, it will be Silicon Valley alone that determines the future of our payments system, a critical piece of our economic infrastructure,” Frydenberg said in an opinion piece published in the Australian Financial Review newspaper.
The Reserve Bank of Australia reported that payments through digital wallets had grown to 8% of in-person card transactions in 2019, up from 2% in 2016.
In March, according to an FIS study, consumers pulled out their digital wallets, like Apple Pay, more often than they did physical wallets when they paid in-store. For the first time, payments using mobile digital wallets overtook cash payments on in-store purchases on a global basis last year.
As reported by the study, cash usage dropped 10% in 2020 to account for only one-fifth of all face-to-face payments worldwide. In Canada, the UK, France, Norway, Sweden, and Australia, use of cash for in-store payments fell by half or more.
As for now, it’s unclear when or how Australia will start to implement these new laws and how the companies like Apple, Google, and WeChat will respond to that. The important thing here is how these new laws could benefit customers and businesses rather than stop this digital payment services trend from growing.
