As Cashless Payments Skyrocket, Australia Seeks to Regulate Digital Wallets
Recognizing the country’s continuing growth in cashless payments and digital wallets, Australia’s government plans to introduce legislation later this week, which would bring Apple Pay, Google Pay, and other digital payment services under the same regulatory umbrella as credit cards and other payments.
The legislation will broaden the powers of the Reserve Bank of Australia (RBA) to regulate payments so that it applies to new and emerging technology. Apple Pay, Google Pay, and China’s WeChat Pay—a popular choice in Australia—have grown rapidly in recent years but have remained outside Australia’s financial regulatory system. The proposed rules would enable the RBA to monitor digital wallet payments in the same way as credit card networks and other transactions. It would also allow the nation’s treasurer to monitor payment platforms that may pose risks to the country.
No Turning Back from Cashless Payments
This news comes amid a boom time in Australia’s use of various forms of cashless payments. According to a report from the RBA, transactions from a digital wallet reached 35% of all card transactions in Q2 2023, up from 10% in early 2020. Mobile wallet transactions in the country grew to 2.4 billion in 2022, up from 29.2 million in 2018. Contactless payments are especially popular among younger consumers, with two-thirds of Australians between the ages of 18 and 29 saying they now use mobile payments. Pre-pandemic, less than 20% of respondents in that age group said they did.
Meanwhile, the RBA’s Consumer Payment Survey showed that in the past three years, the percentage of Australians paying with cash has been cut in half, dropping from more than 27% of total payments to just 13%. In 2019, a little more than half of all in-person, everyday transactions under $10 conducted in Australia involved a credit or debit card. Within three years, that had grown to 73%. One expert has proposed that Australia could be ‘technically cashless’ in a span of three years.
Given these changes, it should come as no surprise that the Australian government wants to keep an eye on the major players in this area. There have been reports that both Google and Apple have opposed the move to designate themselves as payment providers, but Google, at least, has been working with the government on payments reform, according to Lucinda Longcroft, Director of Public Policy at Google Australia.