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Treasurer Josh Frydenberg Tapped To Monitor Google, Apple

A proposal to hand new powers to Treasurer Josh Frydenberg would see him take control of the country’s payment systems, including those ran by tech giants Google and Apple.

The Payments System Review could, theoretically see Apple Pay opened to rivals like the major banks, and would take power from the multiple financial regulators such as the RBA, who currently police such things. Frydenberg would be able to classify digital wallets as designated payment systems and control them as such.

Frydenberg said the influx of new players in the payment game needs a modern and flexible response.

“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,” he said.

“The need to deal with multiple regulators is leading to delays which add to costs and increase barriers to entry for new players,” he said, pointing out that one quarter of new applications for an Australian Financial Services Licence takes roughly five months to be processed.

The Commonwealth Bank has struck out at the tech companies, saying they the financial system is “increasingly burdened” by their lightly regulated presence.

“To remain viable, the maintenance and ongoing modernisation of critical payments infrastructure will need to become a shared responsibility of all parties that benefit financially, directly or indirectly, from its use,” CBA wrote in the review.

The Reserve Bank is targeted in the review for its leniency.

“Some stakeholders observed that the RBA has been reluctant to regulate and relied too much on its powers of influence. It was noted that the interventionist nature of the designation power often means that the RBA relies mainly on its powers of influence to achieve its outcomes,” the report states.

 

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