Give Reserve Bank power over Google and Apple payments, CBA urges
The Reserve Bank should urgently be handed more powers to curtail the growing influence of technology companies in finance, Commonwealth Bank has urged in its submission to a Treasury review of payments.
The country’s largest bank said the rise in digital wallets – applications that allow money to be stored and tracked on phones – had made payments easier but created “new risks to both users and financial stability”.
The government is preparing to give the RBA more powers to designate Apple Pay a payments service. Josh Robenstone
These include exposing banks to financial risk if underlying technologies fail; solvency risks when payments are moved by smaller fintechs; and technology risks given payment systems are more complex and interconnected than ever before.
Digital wallets have “transformed a linear payments value chain consisting of predominantly financial institutions into a complex ecosystem involving a diverse range of participants”, the submission, obtained by The Australian Financial Review, reads – making it crucial for laws to be updated.
The RBA currently regulates payments under 25-year-old legislation. This means it cannot demand data from technology firms, subject them to price regulation like credit card companies, or impose rules relating to smartphones access.
The Albanese government confirmed in June it would broaden regulatory powers in payments and introduce a new licensing regime capturing the tech giants, continuing work that began in the previous Coalition government. A bill on the RBA and Treasurer powers is expected to be produced and passed by the end of the year, with the licensing regime to follow next year.
CBA, which has been the most vocal of the major banks in calling for the government
Read more on afr.com
