The Australian Government has released two Consultation Papers which, if implemented, will result in fundamental changes to the licensing and regulation of PSPs in Australia.
In December 2023, the Australian Government released its second consultation paper in relation to an enhanced regulatory framework for Australian payment service providers (PSPs). The Consultation Paper follows Treasury’s first consultation paper covering ‘in scope’ activities and a draft bill that was recently introduced into Parliament regarding amendments to the Payment Systems (Regulation) Act 1998 (Cth) (PSRA).
The Consultation Paper proposes regulating the payments industry across 5 key areas:
Financial services licensing, including requiring PSPs to hold an Australian financial services licence (AFSL).
Prudential regulation, including requiring major stored value facility (Major SVF) issuers holding in excess of $100 million to be authorised by the Australian Prudential Regulation Authority (APRA).
Common access requirements to be set and supervised by APRA, enabling non authorised deposit-taking institutions (ADIs) to seek direct access to Australian payment systems;
Introducing a formal standard setting framework for certain mandatory technical payment standards, to be set by the Reserve Bank of Australia (RBA) and implemented by a new industry standard setting board.
Introducing ePayments Code reforms that will allow the Minister to set a mandatory revised code in identified segments.
How Gen Advisory can help
If you're an Australian PSP looking to navigate the above regulatory changes and/or apply for an AFSL, get in touch. Led by experienced ex-APRA regulator Michael Lukman, our team of ex-financial sector regulators will provide a safe pair of hands and expertly shepherd you through the AFSL application process.