The Australian Banking Association (ABA) has welcomed the federal government’s release of exposure draft legislation to modernise regulation for payment service providers – a move aimed at improving safety, fairness, and innovation across Australia’s payments landscape.
ABA chief executive Simon Birmingham (pictured) said the reforms represent an important step toward ensuring Australia’s payments framework remains “safe, secure and fit-for-purpose.”
According to the Australian Treasury, the new framework will make Australia’s payment system “safer, stronger, and more productive,” creating a more agile and transparent structure for providers. The draft legislation introduces a core licensing regime and a graduated regulatory framework for stored value facilities such as prepaid accounts, stablecoin issuers, and digital wallets that hold customer funds.
Birmingham said the changes will strengthen consumer safeguards and ensure fairness across all payment methods.
“Australians now have access to a range of payment options and no matter how they choose to pay, they should be afforded the same consumer protections,” he said.
The Treasury said the reforms will help ensure Australians can continue to rely on a “fast, secure and trusted payment system” across mobile payments, international transfers, and digital asset transactions.
The proposed changes would bring emerging payment providers and digital platforms under clearer regulatory oversight, ensuring consistency across traditional and new payment systems.
Birmingham said the reforms deliver long-awaited clarity for payment service providers and align with the banking industry’s calls for a core licensing regime.
“Banks have called for a core licensing regime for some time and welcome the clearer obligations on payment service providers that will be delivered with these reforms,” he said.
“These reforms will help to ensure our regulatory framework continues to deliver a world-class payments system across the entire economy.”
The updated rules will also ensure multinational technology companies that process or facilitate payments are held to the same standards as other providers.
“Importantly, these changes are about making sure all players in the payments system, including multinational tech companies, are captured by the same rules,” Birmingham said.
The draft legislation also outlines a flexible approach to regulation. A digital wallet that simply passes through payment instructions to a bank will face different requirements from one that holds customer funds – balancing consumer protection with innovation. Consultation on the proposed framework is open until Nov. 6.
Birmingham said the banking sector supports the government’s consultative approach and looks forward to continued engagement on the legislation.
“Banks welcome the opportunity to engage with the government on these important reforms that will support confidence, innovation and growth in our payments system,” he said.
The Treasury confirmed the next tranche of legislation, expected in 2026, will cover additional elements such as payment safeguarding rules, exemptions, a revised ePayments Code, and APRA supervisory powers. The reforms complement the Treasury Laws Amendment (Payments System Modernisation) Bill 2025, passed last month, and the draft framework for digital asset platforms now under consultation.
For brokers, the proposed changes highlight the growing integration between banking, technology, and payments – a trend reshaping how customers transact and manage funds.
A clearer regulatory environment will support competition, consumer trust, and operational efficiency, helping brokers and lenders operate within a more secure and transparent financial ecosystem.
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