Fintech 2025

AUSTRALIA Trends and Developments Contributed by: Charmian Holmes, Jaime Lumsden, Michele Levine and Jessica Smith, Hamilton Locke

Introduction The Australian fintech sector is at a major inflex - ion point, with significant regulatory reform on the horizon as new technology solutions emerge, the industry matures and different transaction opportunities present themselves. This article provides a snapshot of some of these head - winds and makes predictions as to what may happen next. The payments industry in Australia has reached a pivotal moment, undergoing significant trans - formations driven by regulatory reforms, tech - nological advancements and evolving consumer expectations. Australia has seen the arrival of new participants in the payments ecosystem increasing the number of payment service pro - viders (PSPs) and others involved in the pay - ments value chain locally and globally. There has been wide adoption of new payment solutions in light of the emerging technology infrastructure (discussed below) and the use of PSP solutions to tackle issues, like “debanking” in the digital asset sector. Regulatory Reforms Payments reforms Further, the Treasury’s proposed exposure draft legislation and regulations, intended to imple - ment a new payments licensing framework, are eagerly awaited. It is anticipated that this will be released in the second half of 2025. Based on current information, it is expected that the new payments licensing framework will expand the types of payment products and ser - vices which require an Australian financial ser - vices (AFS) licence. It is anticipated that this will extend to:

• Stored-value facilities – including digital wal - lets, value on online accounts or virtual or digital prepaid cards. • Payment instruments – including debit and credit cards, buy now, pay later (BNPL) cards and cheques; • Payment initiation services – including PayTo services, recurring payments initiated by a third party or direct debit or credit services; • Payment facilitation services – including merchant acquirers, marketplace platforms, certain payment processors and domestic money transfer providers; • Payment technology and enablement servic - es – including passthrough digital wallets and payment gateways; and • Cross-border transfer services – including international money transfer/remittance ser - vice providers. The reforms are also aimed at drawing clearer boundaries between various regulators in Aus - tralia that share responsibility for payments, including the Australian Securities and Invest - ments Commission (ASIC), the Reserve Bank of Australia (RBA) and the Australian Prudential and Regulatory Authority (APRA). These regulators would have related, but different responsibilities, namely: • ASIC will be responsible for regulating con - sumer protection and conduct of PSPs; • APRA will be responsible for prudential regu - lation of PSPs; and • The RBA would oversee technical standards and there would be a newly authorised body (ASSB) overseen by the RBA to develop them. In addition to the above, the ePayments Code is set to undergo major revision, with a greater focus on consumer protection and clarity as to

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