The Australian government on Wednesday said it would commence a review into the regulatory architecture of the country's payments system to ensure it is fit for purpose and can support continued innovation.
According to Treasurer Josh Frydenberg, the review will look at whether the existing regulatory architecture of the payments system is suitable given rapid changes in technology, how to drive increased productivity through innovation and competition, assess government payment systems, and analyse global trends to determine how Australia can remain internationally competitive.
"The regulatory architecture of the payments system has served Australia well, but has remained largely unchanged for over two decades. This comes at a time when consumer appetite for using different payment methods, like contactless payments, has accelerated," he said in a statement.
"It is critical that the regulatory architecture supporting our payments system promotes innovation and competition to ensure that costs to business are minimised, consumer experience is enhanced, and there is confidence in the security of the system."
The review will be chaired by King and Wood Mallesons partner Scott Farrell, who also undertook the formative review that led to the Consumer Data Right regime, and involve consultation from industry, consumer and privacy advocates, and other interested parties to develop a report and recommendations.
The review is part of the Digital Business Package that was announced as part of Budget 2020-21 earlier this month. Under the package, the federal government has committed almost AU$800 million to drive further progress towards Australia's bid to become a leading digital economy by 2030.
"Promoting a more innovative and robust payments environment is part of the Morrison government's plan to build a more competitive and productive economy as we recover from the COVID-19 crisis," Frydenberg said.
The review is expected to deliver a report to the federal government by April 2021.
At the end of last year, Reserve Bank of Australia (RBA) governor Philip Lowe called for the need to update the country's payments system.
"With the digital economy being an important key to Australia's future economic prosperity, we need a payments system that is fit for purpose," he said.
"We will only fully capitalise on the fantastic opportunities out there if we have a payments system that works for the digital economy. In the fast-moving world of payments, things don't stand still and there are some important areas we need to work on."
Any updates that will be made to the regulatory architecture of Australia's payments system as a result of this review would be in addition to other recent changes that have been introduced to the payments sector, such as the introduction the New Payments Platform and the open banking regime.
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