Reserve Bank governor Philip Lowe wants payment laws reviewed by the Federal Government, as big tech companies enter the Australian financial sector.
Square’s $39 billion acquisition of Afterpay has prompted a flood of concerns about the growing power from tech companies, coming a few days after a parliamentary joint committee reviewed Apple’s restrictions on the payments chip on its iPhone.
this week has put the growing influence of big tech in the payments system in focus for policymakers, the chairman of the House of Representatives economics committee, Tim Wilson, said. A parliamentary joint committee last week reviewed the growing power in payments of Apple, which has placed restrictions on bank access to the payments chip on its iPhones.
“The payments systems regulation act needs a review,” RBA governor Philip Lowe said on Friday.
“We need better arrangements for regulating ‘stored value’. There is a need to update the legislation, including perhaps a special licensing regime for payment providers.”
The RBA wants its regulation of payment “systems” to change to payment “services”. Such a wording change “would give us more flexibility”, Lowe said.
“The payments landscape is changing very, very rapidly,” he said “Our regulatory arrangements need to keep pace with that. They need updating in a couple of areas. We have further work to do here.
“Our regulatory arrangements need to keep pace with the fast-moving landscape. I encourage the Parliament over time to adjust the regulatory arrangements here.”
Lowe explained how the RBA has no jurisdiction over Apple’s payment systems.
“The Parliament could set up a process to do that if it so chose,” he said. “We are going to have a more competitive system if there can be competition among the providers of digital wallets.
“Ultimately there will be lower fees and better services if we have competition and open access. That is an issue. But it’s not something the Reserve Bank can do anything about. We don’t have the power to do it.”
