Australia's Department of the Treasury has published tranche 1a exposure draft explanatory materials for its payment system modernisation agenda, proposing an activity-based regulatory framework that brings a wider range of payment service providers (PSPs) into the Australian Financial Services (AFS) licensing regime. The draft replaces the legacy “non-cash payment facility” construct with new, technology-neutral definitions covering stored value facilities (SVFs, including tokenised SVFs), payment instruments and three categories of “payment service” (payment initiation, payment facilitation, and payment technology and enablement services). Under the proposed Corporations Act changes, constitutionally covered corporations (and their representatives) providing the new payment services or financial services relating to SVFs and payment instruments would generally need an AFS licence and would be subject to the standard licensee obligations, with adjustments to retail-client treatment and dispute resolution. The draft also introduces specific obligations for intermediary licensees supporting another licensee’s retail-facing payment services to cooperate with internal dispute resolution and the Australian Financial Complaints Authority, extends ASIC’s information-gathering powers to suspected unlicensed providers, and adds tokenised SVF disclosure requirements including internet publication of material changes or significant events affecting redemption and, where required by regulation, monthly reserve asset and outstanding liability information. The materials also outline further reforms that are intended but not included in this exposure draft, to be consulted on in a later draft, including an APRA-administered prudential regime for “major SVF providers” once stored value exceeds a scale set in regulation (intended to be AUD 200 million on a group aggregate basis), a ministerial power to make a new mandatory ePayments Code, a safeguarding regime for payment-related money, and a streamlined unclaimed money process for inactive or dormant balances held in major SVF accounts. Commencement, application and transitional provisions, along with related amendments to the ASIC Act and other exclusions and exemptions, are flagged for a later exposure draft.
Department of Treasury (Australia) 2025-10-09
Australia's Department of the Treasury issues exposure draft to overhaul payment service provider licensing and set up APRA registration for major stored value facilities at an intended AUD 200 million threshold
Australia's Department of the Treasury has released tranche 1a exposure draft materials for its payment system modernisation agenda, proposing an activity-based regulatory framework to include more payment service providers in the Australian Financial Services licensing regime. The draft introduces technology-neutral definitions for stored value facilities, payment instruments, and payment services, requiring AFS licences for providers. It outlines obligations for intermediary licensees, extends ASIC's powers, and sets disclosure requirements for tokenised stored value facilities, with further reforms to be consulted on later.