August 30, 2021, | AtoZ Markets-It was known today that the Australian Government is studying the implementation of new laws to tighten the regulation of digital payment services. This would undoubtedly affect the biggest tech companies like Apple, Google, and Alphabet.
However, services such as Apple Pay, Google Pay, and the Asian WeChat Pay, which have grown rapidly in recent years, are not currently designated as payment systems, which leaves them outside the regulatory system.
"Ultimately, if we do nothing to reform the current framework, Silicon Valley alone will determine the future of our payments system, a critical piece of our economic infrastructure," Treasurer Josh Frydenberg said in a published op-ed. in the Australian Financial Review newspaper.
On the other hand, the Bank for International Settlements (BIS) called earlier this month that global financial watchdogs urgently address the growing influence of "big technology" and the huge amounts of data controlled by groups like Google. , Facebook, Amazon, and Alibaba.
What the Australian Government Has Said
The Australian report has been known to recommend that the government have the power to designate tech companies as payment providers, clarifying the regulatory status of digital wallets.
The report also recommends that government and industry jointly establish a strategic plan for the overall payments ecosystem. And that a single, integrated licensing framework be developed for payment systems.
The Reserve Bank of Australia, which is currently in charge of designating who is a payment service provider, reported that payments via digital wallets had grown to 8% of in-person card transactions in 2019, compared to 2% in 2016.
Similarly, the Commonwealth Bank of Australia has estimated that digital wallet transactions have more than doubled in the year to March, reaching 2.1 billion Australian dollars.
Do You Know What Digital Payments Are?
Digital payments have gained prominence as the best solution for sending and checking money across borders. A digital payment transaction that aims to initiate, authorize and authenticate transfers between individuals, merchants, or even government entities.
The way digital payments work varies from provider to provider. Generally, providers rely on payment networks to leverage payment rails, and users send money from a straightforward, intuitive payment platform.
Payment rails are the different processing modes for cashless payments. Different rails can include cards, bank accounts, the SWIFT network, blockchain, and more. The process is straightforward. After you sign up with a digital payment provider, you’ll choose the mode of payment you want to use.
Here’s a look at five types of digital payments:
2. Local payments
3. Digital checks
4. Wallets payments
5. Wire transfer
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