Fintech 2025

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

remedies for electronic transactions and mis - taken payments. While to date the ePayments Code has been a voluntary initiative, it is set to become mandatory. As a result, more PSPs will be required to comply with standards on security and electronic payment systems. BNPL Following a period of business consolidation and exits in the BNPL sector, customers are still accessing BNPL solutions as an alternate means of credit, given cost of living pressures and higher interest rates. It will be interesting to see how the next iteration of the BNPL sector will materialise in light of changes to low-cost credit contracts introduced late last year via the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024 (BNPL Bill) to the National Consumer Credit Pro - tection Act 2009 (Cth) (NCCP). BNPL will be regulated as a low-cost credit con - tract and required to have an Australian credit licence from 10 June 2025. Conduct obligations for a BNPL credit licensee will include modified responsible lending obligations. BNPL providers will have to: • Assess if the product is suitable; • Take steps to make reasonable inquiries into the consumer’s financial situation; and • Verify the suitability assessment. In connection with this, BNPL providers will need to: • Have an unsuitability assessment policy; and • Undertake reasonable consumer inquiries having regard to the nature of the product and the applicable target market.

As with all regulatory reforms, it will be interest - ing to see the different approaches taken by industry to comply with the new requirements and the impact this will have on way BNPL prod - ucts are offered. It is suspected that: • Businesses that already provide regulated consumer credit will leverage existing compli - ance frameworks and may seek to harmonise responsible lending obligations across BNPL and non-BNPL products; and • Businesses that only provide BNPL products will need to significantly uplift their existing processes to reflect the new requirements. Digital assets According to the Independent Reserve Crypto Index as at February 2025, 31% of Australians now own digital assets. As digital assets become increasingly mainstream for consumers and are more readily accessed with traditional finance, this is driving a concurrent proliferation of differ - ent providers and products and services. This includes exchange offerings, wallet offerings, custody solutions, investment platforms, staking and earn like products, as well as stablecoins, wrapped tokens and other asset backed tokens. Corporate collapses such as FTX have seen leg - islators and regulators globally push for regula - tory reform. Australia is no different. At present, certain digital asset exchanges are regulated as “designated service” under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act). In addition, some digital asset products and ser - vices may also be regulated under the financial services licensing regime, to the extent these products and services involve the provision of a financial product/service. It is also possible for certain digital asset products and services

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