Australia wants to reclassify & strictly regulate Apple Pay

AppleInsiderAppleInsider
Posted:
in iPhone edited August 2021
Digital wallets currently fall outside Australia's traditional financial regulatory systems, so regulators propose labeling Apple and other tech giants as payment systems to better govern their wallets.

Apple Pay targeted by Australian regulators
Apple Pay targeted by Australian regulators


Apple Pay, Google Pay, and other digital wallets allow users to add banking cards to their devices and pay for goods and services. This payment method has become more prevalent in recent years, and the Australian government fears losing a grip on such systems without proper regulation.

According to Reuters, the Australian government wants to designate tech companies as payment systems to bring them into the regulatory environment. As of now, companies like Apple, Google, and WeChat exist outside of the financial regulatory system.

Treasurer Josh Frydenberg said he would "carefully consider" tighter regulations on digital payment services. "Ultimately, if we do nothing to reform the current framework, it will be Silicon Valley alone that determines the future of our payments system, a critical piece of our economic infrastructure," he concluded.

It has also been recommended that the government and tech industry establish a strategic plan for a single, integrated licensing framework for payment systems. Apple, Google, and others each use proprietary systems developed in-house for payments.

Apple was also the target of Australian regulators in July 2021 due to the closed nature of iPhone's NFC payment system. Regulators questioned Apple as to why it only allowed Apple Pay to use its tap-to-pay feature, and it said security.

As regulators worldwide struggle to deal with the emergence of digital wallets, they continue to see rapid adoption. According to The Reserve Bank of Australia, payments from digital wallets grew to 8% of in-person transactions from 2% in 2016.

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Comments

  • Reply 1 of 16
    leehericksleehericks Posts: 41member
    Seems to me if the government wanted to make a great digital payment system for their country, they have the resources to do that. Now they just want to piggyback on the success of tech companies doing the innovating?
    rob53foadlkruppGeorgeBMacwatto_cobra
  • Reply 2 of 16
    gatorguygatorguy Posts: 24,211member
    It would seem to make sense. The devil is in the details of course.
    MplsP
  • Reply 3 of 16
    rob53rob53 Posts: 3,248member
    Don't see PayPal listed. Why not?
    watto_cobra
  • Reply 4 of 16
    mike1mike1 Posts: 3,279member
    Digital wallets currently fall outside Australia's traditional financial regulatory systems, so regulators propose labeling Apple and other tech giants as payment systems to better govern their wallets.


    Corrected.

    Digital wallets currently fall outside Australia's traditional financial regulatory systems, so regulators propose labeling Apple and other tech giants as payment systems to better govern their wallets.
    rob53watto_cobra
  • Reply 5 of 16
    MplsPMplsP Posts: 3,921member
    rob53 said:
    Don't see PayPal listed. Why not?
    Presumably it would be included. (Is PayPal a significant player in Australia?)

    gatorguy said:
    It would seem to make sense. The devil is in the details of course.
    Agreed. good regulation can foster competition and growth, ultimately improving the system for consumers. Bad regulation can do the opposite. (of course, if you have a monopoly and regulation limits your power then you view it quite differently!)
    muthuk_vanalingamwatto_cobra
  • Reply 6 of 16
    the1maximusthe1maximus Posts: 89member
    Apple Pay isn’t a payment system, a Card terminal, Point of Sale (PoS) Register, Square Terminals, Those are payment systems. They allow people to pay for good. 

    Apple Pay, Samsung Pay, Google Pay and even PayPal are systems to replace Physical Cards. They allow you to process a payment both physically and digitally using your banking credentials. 

    Apple though is the only one that takes the processing of a payment a step further by tokenizing the user’s banking info. This helps to privatize the user’s info, so in the event of a system breach, like what happened to Home Depot and Target a few years ago, the user’s info would not have been exposed. 
    rob53GeorgeBMacthtigorskywatto_cobra
  • Reply 7 of 16
    jwdawsojwdawso Posts: 389member
    Ultimately, it will be The Government and their cronies that determines the future of our payments system, a critical piece of the Elites power.
    lkruppwilliamlondonentropyswatto_cobra
  • Reply 8 of 16
    rob53rob53 Posts: 3,248member
    the1maximus said:
    Apple Pay isn’t a payment system, a Card terminal, Point of Sale (PoS) Register, Square Terminals, Those are payment systems. They allow people to pay for good. 

    Apple Pay, Samsung Pay, Google Pay and even PayPal are systems to replace Physical Cards. They allow you to process a payment both physically and digitally using your banking credentials. 

    Apple though is the only one that takes the processing of a payment a step further by tokenizing the user’s banking info. This helps to privatize the user’s info, so in the event of a system breach, like what happened to Home Depot and Target a few years ago, the user’s info would not have been exposed. 
    Ok, I agree. What happens when websites store credit cards and let you pay that way? Will Australia try and regulate those as well? They the same as using any of the paying systems. 
    watto_cobra
  • Reply 9 of 16
    GeorgeBMacGeorgeBMac Posts: 11,421member
    Seems to me if the government wanted to make a great digital payment system for their country, they have the resources to do that. Now they just want to piggyback on the success of tech companies doing the innovating?

    Most likely, I think, is that their bankers want a bigger slice of that pie.

    Perhaps, Apple needs to make bigger campaign donations?

    But, that said, Australian politicians have been pretty much nutso for the past 5 years or so...
    edited August 2021
  • Reply 10 of 16
    gatorguygatorguy Posts: 24,211member
    Apple Pay isn’t a payment system, a Card terminal, Point of Sale (PoS) Register, Square Terminals, Those are payment systems. They allow people to pay for good. 

    Apple Pay, Samsung Pay, Google Pay and even PayPal are systems to replace Physical Cards. They allow you to process a payment both physically and digitally using your banking credentials. 

    Apple though is the only one that takes the processing of a payment a step further by tokenizing the user’s banking info. This helps to privatize the user’s info, so in the event of a system breach, like what happened to Home Depot and Target a few years ago, the user’s info would not have been exposed. 
    Not true, and you should have verified the veracity of a claim such as that before stating it's a fact. It's not. Google Pay also tokenizes the payment info, and was doing so years before Apple Pay was even a "thing".
    https://support.google.com/pay/merchants/answer/6345242?hl=en
    https://www.advantio.com/blog/heres-how-google-pay-apple-pay-samsung-pay-protect-your-card-details
    edited August 2021 muthuk_vanalingam
  • Reply 11 of 16
    mcdavemcdave Posts: 1,927member
    Why wouldn’t all payment systems we regulated by payment legislation/code of practice? Why do “digital” systems not qualify along with others?
    MplsPwatto_cobra
  • Reply 12 of 16
    guylanderguylander Posts: 1member
    rob53 said:
    Don't see PayPal listed. Why not?
    Not applicable. PayPal already operates as a Financial Services company in Australia and holds an Australian Financial Services License.
    https://www.paypal.com/au/webapps/mpp/about
    gatorguyFileMakerFellerwatto_cobra
  • Reply 13 of 16
    genovellegenovelle Posts: 1,480member
    gatorguy said:
    Apple Pay isn’t a payment system, a Card terminal, Point of Sale (PoS) Register, Square Terminals, Those are payment systems. They allow people to pay for good. 

    Apple Pay, Samsung Pay, Google Pay and even PayPal are systems to replace Physical Cards. They allow you to process a payment both physically and digitally using your banking credentials. 

    Apple though is the only one that takes the processing of a payment a step further by tokenizing the user’s banking info. This helps to privatize the user’s info, so in the event of a system breach, like what happened to Home Depot and Target a few years ago, the user’s info would not have been exposed. 
    Not true, and you should have verified the veracity of a claim such as that before stating it's a fact. It's not. Google Pay also tokenizes the payment info, and was doing so years before Apple Pay was even a "thing".
    https://support.google.com/pay/merchants/answer/6345242?hl=en
    https://www.advantio.com/blog/heres-how-google-pay-apple-pay-samsung-pay-protect-your-card-details
    If that is the case why all the fuss about Apple not giving them access to the data when Google was? Also, why does Apple have to directly signup each bank in every country to support it when Google doesn’t if it’s the same thing. Sounds like someone is not telling the whole story. 
    GeorgeBMacwatto_cobra
  • Reply 14 of 16
    gatorguygatorguy Posts: 24,211member
    genovelle said:
    gatorguy said:
    Apple Pay isn’t a payment system, a Card terminal, Point of Sale (PoS) Register, Square Terminals, Those are payment systems. They allow people to pay for good. 

    Apple Pay, Samsung Pay, Google Pay and even PayPal are systems to replace Physical Cards. They allow you to process a payment both physically and digitally using your banking credentials. 

    Apple though is the only one that takes the processing of a payment a step further by tokenizing the user’s banking info. This helps to privatize the user’s info, so in the event of a system breach, like what happened to Home Depot and Target a few years ago, the user’s info would not have been exposed. 
    Not true, and you should have verified the veracity of a claim such as that before stating it's a fact. It's not. Google Pay also tokenizes the payment info, and was doing so years before Apple Pay was even a "thing".
    https://support.google.com/pay/merchants/answer/6345242?hl=en
    https://www.advantio.com/blog/heres-how-google-pay-apple-pay-samsung-pay-protect-your-card-details
    If that is the case why all the fuss about Apple not giving them access to the data when Google was? Also, why does Apple have to directly signup each bank in every country to support it when Google doesn’t if it’s the same thing. Sounds like someone is not telling the whole story. 
    What does "access to the data" mean? What data? And yes Google has to sign up banks the same as Apple does. What the Australian banks don't like is paying Apple to process their cards for them securely via NFC when doing so with their own apps on Android and also securely via NFC is free. That's the crux of it. Google Pay is not less secure than Apple Pay.
    edited August 2021 muthuk_vanalingam
  • Reply 15 of 16
    laytechlaytech Posts: 335member
    I’m dubious, if Government is involved can’t help the big four banks are behind this somewhere. Hopefully I’m wrong. 
    watto_cobra
  • Reply 16 of 16
    FileMakerFellerFileMakerFeller Posts: 1,546member
    GeorgeBMac said:
    Seems to me if the government wanted to make a great digital payment system for their country, they have the resources to do that. Now they just want to piggyback on the success of tech companies doing the innovating?

    Most likely, I think, is that their bankers want a bigger slice of that pie.

    Perhaps, Apple needs to make bigger campaign donations?

    But, that said, Australian politicians have been pretty much nutso for the past 5 years or so...
    While that first allegation is certainly plausible, it's the regulation of the Australian Financial Services industry that saw Australian banks through the GFC in relatively good shape. While the banks might be complaining to the government, it's probably more related to wanting a "level" playing field by ensuring that the same regulations apply to all rather than to limit the market power of competitors.

    Australian politics has been crazy for a lot more than the last five years.
    watto_cobra
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