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Treasury Laws Amendment (Payments System Modernisation) Bill 2025

High-Level Summary

The Treasury Laws Amendment (Payments System Modernisation) Bill 2025 amends the Payment Systems (Regulation) Act 1998 to modernise the payments regulatory framework by expanding key definitions to include emerging payment technologies, introducing ministerial powers to designate and regulate systems in the national interest, and updating penalties with civil regimes and enforceable undertakings.

It implements the Modernising Australia’s Payment System measure announced on 7 June 2023 and commences three months after Royal Assent.

Summary

The Bill primarily amends the Payment Systems (Regulation) Act 1998 (PSRA) to ensure the regulatory framework is technology-neutral and fit for purpose in the face of emerging payment innovations. Key changes include:

  • Modernised definitions of payment system and participant to capture non-monetary digital assets, three-party/closed-loop arrangements, buy-now-pay-later providers, digital-wallet services and crypto-asset payment facilitators.
  • New ministerial national interest designation power allowing the Assistant Treasurer to designate special payment systems beyond the Reserve Bank’s public interest test, consult the RBA and nominate special regulators (e.g., ASIC, APRA, AUSTRAC).
  • Ability for the Minister to issue matters-based and purposes-based directions to special regulators, with statutory safeguards to protect regulatory independence.
  • Modernised enforcement and penalty regime: introduction of civil penalty provisions under the Regulatory Powers (Standard Provisions) Act 2014, a framework for enforceable undertakings, and increased maximum criminal penalties for failure to comply with directions.
  • Consequential amendments to the ASIC Act, Competition and Consumer Act 2010, Corporations Act 2001 and Income Tax Assessment Act 1997 to align definitions and regulatory exclusions with the expanded scope of designated and special designated payment systems.

The Bill has no direct financial impact, is estimated to impose minimal compliance costs, and will commence on the day after the period of three months following Royal Assent.

Argument For
Normative Bases
  1. Utilitarian Ground Truth
  2. Hobbesianism

Modernising the payments regulatory framework enhances economic stability and consumer welfare by closing regulatory gaps in emerging technologies such as buy-now-pay-later schemes, digital wallets and stablecoins [Judgment]. A technology-neutral definition of payment systems and participants ensures that new players cannot exploit loopholes to the detriment of users and financial stability.

The introduction of a ministerial designation power and special regulators allows the government to respond swiftly to national security, cyber-security, anti-money-laundering or crisis management issues that fall outside the Reserve Bank’s traditional public interest remit [Judgment]. Strengthening enforcement with civil penalties, enforceable undertakings and higher criminal sanctions provides clear deterrence against non-compliance without imposing excessive costs, thereby preserving confidence and integrity in the payments ecosystem.

Argument Against
Normative Bases
  1. Value-Neutral / Epistemic Objection
  2. Propertarianism

The existing Payment Systems (Regulation) Act already gives the Reserve Bank the flexibility to regulate payment systems and participants. Creating overlapping designation powers, special regulators and ministerial directions risks adding unnecessary complexity and regulatory uncertainty for fintech firms and established providers [Judgment].

Government intervention through national interest designations and directions may undermine the independence of financial regulators and the property rights of private entities, opening the door to politicised regulation [Judgment]. The modest compliance-cost savings estimated by the Bill are unlikely to offset long-term costs associated with fragmented oversight and potential duplication of regulatory functions [Judgment].

Key Links:
Official URL
Bill Digest URL
Explanatory Memo URL
Latest Bill URL
Date:

2025-07-30

Chamber:

House of Representatives

Status:

Before House of Representatives

Sponsor:

Unspecified

Portfolio:

Treasury

Categories:

Financial Regulation, Consumer Protection

Timeline:
30/07/2025

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