Julie-Ann Campbell (Moreton, Australian Labor Party) Share this | Hansard source

I think it's fair to say that, when most people hear the words 'payments system modernisation', their eyes might glaze over. They might not be particularly excited. They might lean back in their chair and get ready for a snooze. They might put in their earphones and settle in to watch something on a streaming service—but not me. I am excited by payment systems because, while they might not seem sexy, they are something that we use every single day.

If you are writing out a cheque to someone special on their big birthday, if you are going to the corner store and swiping your debit card to buy milk when you are on your way home, if you are tapping your digital wallet at the supermarket when you're off to buy nappies, if you are paying cash when you are at the petrol station—each and every one of those things is a payments system. It's not something that we think about very often, but we use payment systems more than we do anything else that we will talk about today in this House. We use them to buy things every single day. But the technology is changing, and we have to change with it. To make sure that we protect consumers when it comes to payment systems, we have to make sure that the RBA can regulate them, and that is what this bill is all about.

While the Treasury Laws Amendment (Payments System Modernisation) Bill 2025 might not be the subject of intense water-cooler discussion in offices across the country, it is a very important piece of legislation. At its core, what it addresses is the risks that new and emerging technologies pose to the way we pay for goods and services. In 2025 you do that more often than not with just a tap of your phone. Updating the payments system regulatory framework is necessary to ensure Australia has a fit-for-purpose, modern and efficient payments system. This is crucial because the smooth operation of the economy rests upon it. You use the payments system when you dash to the servo to buy that milk late at night, you use it to transfer money to your mate at a restaurant after a shared dinner, and it's used to put your wages into your account. Every single day we use a payments system. None of us probably think very much about it when we're tapping our phones to buy our Pepsi Max, but it is the foundation of our financial system.

The payments system supports the stability of the financial system by minimising risks associated with transactions and by facilitating the flow of payments. A well-functioning payments systems bolsters the development of the financial sector through inspiring consumer and business confidence in their transactions. It also links Australians to the global marketplace. We know that consumers, everyday people in the community and in our society, need to have that confidence if they're going to put their hard earned money across the table to buy goods and services. Ensuring that our payments systems are up to date with technology and are well regulated is what drives that confidence for consumers. The components of the payments system are the nuts and bolts of our financial system. That's why it needs to be safe, that's why it needs to be trusted and that's why it needs to be accessible. And that is what this bill delivers.

The sector is a rapidly evolving sector, and, as a result of the digital revolution, teenagers today make purchases instantly and seamlessly with their watches or their phones. They've never had to learn how to write a cheque, and the only cash they see is in birthday cards from their grandparents. We now have a payment system that is large and complex, one that is continually adjusting to new technologies and processes. As the transactions become easier and more convenient for consumers, there are opportunities for growth and also increased risk. Where there is increased risk, we need to make sure that people in our community are protected, without stifling growth that will be critical to our economy.

There is also the need to balance this with maintaining the more traditional methods of payment, to meet the needs of consumers who rely on those systems. Those consumers are often some of the most vulnerable in our community. That's why, as we expand the regulatory framework for payment systems, we need to make sure that those consumers who use more traditional forms of payments are still protected, particularly older Australians. The New Payments Platform, NPP, underpins the modern payment system, enabling fast and secure transactions. Services such as PayID and PayTo have changed the way consumers and businesses interact. As of mid-2023, nearly 13 million PayIDs had been created, over 25 per cent of account-to-account transactions were being processed via the NPP, and more than 100 payment providers were offering NPP services to approximately 90 million consumer accounts. We are hugely reliant on the robustness and security of this digital infrastructure, and we must take into account the necessity of safeguarding against outages, against technological failures and against cyberattacks.

This bill is part of Labor's commitment to the Strategic Plan for Australia's Payment System, which was released in June 2023. The strategy lists five priorities for the government. The first is promoting a safe and resilient payment system. This involves reducing the prevalence of scams and fraudulent activity, strengthening cybersecurity measures to guard against attacks and maintaining robust oversight of systematically important payment infrastructures. When it comes to scams, everyone in this chamber knows someone who has been hit by a scam, whether it be digital or online. Making sure that we as a government prioritise protecting those vulnerable people who are the target of scams is an important part of what we do. The secondary focus is on ensuring the payments regulatory framework keeps pace with technological and market developments. That is what we're talking about particularly in this bill today. Key initiatives include establishing a comprehensive licensing framework for payment services providers and promoting competition through transparent access to payment systems.

Thirdly, there is a need to modernise the payments infrastructure by implementing the phased removal of cheques, the enhancement of existing systems and the continued provision of access to cash, to ensure that no community is left behind. This purpose is designed to make sure that, whether you like to tap your phone as you get on the bus, you like to put cash in a card to your grandchild on their birthday or you like to use a debit card, it doesn't matter; you will be protected, you can have confidence in that payment system, and you will have a regulated system that works for everyone.

The next priority area is in uplifting competition, productivity and innovation across the economy. We've recently seen that the Treasurer hosted a roundtable focused on productivity. With our laser focus on ensuring that productivity increases and that we have reform in the productivity space, this is another layer to that work. This means aligning the payment system with broader economic and digital transformation goals. These include the Consumer Data Right framework, supporting wider adoption of digital ID and investing in digital and technological skills development.

Finally, the government aims to establish Australia itself as a leader in the global payments landscape, by creating a regulatory environment that encourages innovation and investment. This includes facilitating seamless cross-border payments and exploring the policy rationale for introducing a central bank digital currency. This background is useful to explain the broader work the Albanese Labor government is undertaking in this area, and this bill is an important part of that work.

The Treasury Laws Amendment (Payments System Modernisation) Bill 2025 provides expanded definitions for 'payments system' and for 'participant' so that the Reserve Bank of Australia can regulate new and emerging payments systems and participants. These include digital wallet providers and buy-now pay-later service providers.

As part of the risk management protocols, the legislation will also enable the Treasurer to designate payment services or platforms that present risks of national significance. This isn't just about protecting everyday consumers, this isn't just about protecting people in our community and families in our community, this is also about protecting our country from risks of national significance. These designations will give appropriate regulators additional oversight powers. This is a sensible and responsible approach from the forward-looking Labor government.

Under the new legislation, the Treasurer will only be able to give general directions. The Treasurer will not be able to direct the regulator on how to exercise functions or how to enforce regulations. This ensures the ongoing independence of the regulator in assessing and exercising their regulatory powers. These measures are key steps outlined in A strategic plan for Australia's payments system. They also directly respond to recommendations in the payments systems review that the RBA should be better-positioned to regulate new and emerging payments systems that are part of the changing and growing payments ecosystem.

The recommendations also state that there should be a greater role for the government, through the Treasurer, in setting the strategic direction of the payments ecosystem in collaboration with regulators and industry. That is what this bill does.

As I mentioned, one of the drivers of these reforms is for Australia's regulatory framework to facilitate competition and innovation while upholding financial stability and decreasing risk. To achieve this, the Albanese Labor government embarked on a comprehensive consultation process with stakeholders regarding this bill. Consultation partners included industry participants, government agencies and regulators prior to the release of the strategic plan. The Treasury also received 30 submissions from banks, payment-service providers and industry associations. Further stakeholder meetings were held with organisations such as the Australian Banking Association, the National Retail Association, PayPal, Google and the Commonwealth Bank of Australia to work through feedback on the text of the new definitions and the scope of the new powers proposed for the Treasurer.

The measures outlined in this bill are necessary to ensure that the RBA can not only regulate new and emerging payment providers but also combat risks to our national interest by expanding these powers to designated regulators. The measures support the government's key principles for the payment system: it is to be trustworthy, accessible, innovative and efficient. At their heart, what these laws are about is keeping up with the times. Because payment systems are something that we might not think about every day, but they are something that we use every day. Making sure that, as technology advances, we continue to protect consumers, to protect the national interest, to protect families who go about their day not thinking about payment systems but using them is incredibly important, because we don't want people to be scammed, we don't want new technologies to remain unregulated and we don't want families not to have the confidence to be able to pay for their groceries, their fuel and their health care every single day. They also speak to Labor's determination to provide a safe and secure payment environment for all Australians.

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