Consumers who make purchases on their mobile phones, use buy now, pay later platforms, and invest in cryptocurrency could be better protected under a federal government plan to overhaul Australia's payments system and regulate financial technology organisations.
Federal Treasurer Josh Frydenberg said the government planned to legislate "the largest reforms to our payments systems in a quarter of a century".
Mr Frydenberg said the "comprehensive payments and crypto-asset reform plan" would "place Australia among a handful of lead countries globally".
What Happens When You’re the Investment
Social capital is becoming economic capital.So Masmej did something few 23-year-olds would think to do: He tokenized himself. That is, he created a financial instrument known as a social token, a form of cryptocurrency whose value revolves around a person, to sell shares in himself. Holders of $ALEX would receive 15 percent of Masmej’s income for the next three years, capped at $100,000 overall, and would be able to exchange tokens for special privileges: 10,000 $ALEX bought a retweet from Masmej on Twitter; 20,000 $ALEX, a one-on-one conversation with him; 30,000 $ALEX, an introduction to someone in his network.
A particular focus of the reforms is to rein in buy now, pay later (BNPL) companies such as Afterpay and Zip Co, digital wallets such as Apple Pay and Google Pay, and cryptocurrency.
However, details on most of the reforms are not expected to be settled until various agencies consult and report back to the government at the end of 2022, which will be after the federal election.
The government also wants to legislate to give the treasurer and Reserve Bank of Australia more power to direct payment system policy and address emerging and future gaps in the payments regulatory systems framework.
"Without reform, Australian businesses and consumers could increasingly transact in environments that are largely unregulated from an Australian perspective, with any rules in play instead determined by foreign governments and large multinationals, including tech giants," the treasurer said.
David Marcus: "Father" from Facebook's digital currency is
of the former PayPal boss David Marcus, who was the driving force behind the digital currency developed by Facebook leaves the Group. He pretend to actively want to be active as an entrepreneur. © Facebook Ex-PayPal-Boss David Marcus. The 48-year-old David Marcus initially led to Facebook since 2014 the chat service Messenger - and was then entrusted by founder Mark Zuckerberg with the development of its own digital currency.
Digital wallets under the spotlight
Digital wallets allow consumers to make tap-and-go purchases and have grown in popularity during the COVID-19 pandemic.
About 55 million non-cash payments, worth about $650 billion, are made in Australia every day, according to Treasury. Almost half of Australians make payments using their mobile phone.
The big banks have been vocal about their dislike of big tech companies, such as Apple and Google, muscling in on their turf and denying them enough access to their platforms.
In July, CBA chief executive Matt Comyn told a parliamentary inquiry the restrictions Apple had on its phones were stopping banks and fintechs from setting up their own iPhone digital wallets.
Cryptocurrency protections for investors
On cryptocurrency, the government plans to investigate a custody regime that would protect consumers who trade on exchanges.
Treasurer to lift growth in budget review
Treasurer Josh Frydenberg says he will be upgrading the economic growth outlook for next year when he hands down his first mid-year budget review.The treasurer confirmed last week the mid-year economic and fiscal outlook will be released on December 16.
It comes as two cryptocurrency exchanges have collapsed in recent months, with some customers facing the possibility of losing all their crypto investments.
The Board of Taxation will also be asked to look into how best to tax these digital assets.
As global leader of digital transformation practice at Norton Rose Fulbright, Nick Abrahams said the government had been missing out on tax revenue by not regulating the crypto space.
He said 17 per cent Australians own crypto, "with another 13 per cent saying they will buy it in the next year".
"The growth is massive," he said.
"For the government, this regulatory response is as much about preserving the tax base as it is about consumer protection."
Mr Abrahams said major reforms were also needed to deal with the increasing convergence of tech, payments, banking and cryptocurrencies.
"The government can no longer sit on the sidelines and the Square/Afterpay deal was a catalyst," he argued, "[with] Square, a big player in crypto, acquiring Afterpay, a world leader in BNPL, to create one of the largest companies on the ASX, with very little regulation.
Racing NSW under investigation over handling of workers compensation claims and surveillance of injured workers
One of the nation's largest racing bodies is under investigation for what injured workers say is its aggressive and unfair handling of workers compensation claims. For almost a decade, Joanne Howard has been followed and filmed.Through the bushes at her home near Yass in southern New South Wales.In the supermarket.On a trip to the Tamworth Country Music Festival in 2016.Even at her grandson's first birthday party in October last year."They have been following me around for years and it normally doesn't get to me," Ms Howard says."But what they did to me last year, that really rattled me."That was terrifying.
"Maybe we call these the "Square reforms."
The chief executive of the Consumer Action Law Centre, Gerard Brody, welcomed the the Treasurer's foreshadowed consultation on BNPL in 2022.
"This is an opportunity to ensure BNPL is regulated effectively, and consistently, with other credit products, to address the significant risk of debt and financial stress associated with these products," he said.
The government will also ask the Council of Financial Regulators to look at de-banking — which is when certain businesses or account holders are denied banking and other financial services.
Plans to overhaul Australia's outdated payment system are in response to the 41 recommendations of three recent reviews on the topic, which also examined how to regulate cryptocurrency.