The Australian Government has released two Consultation Papers which, when implemented, will result in fundamental changes to the licensing and regulation of PSPs in Australia.
In 2023, the Australian Government published two Consultation Papers and a draft bill which, when implemented, will result in significant changes to the licensing and regulation of payment service providers (PSPs) in Australia. (See: Treasury Consultation Paper 1 and Treasury Consultation Paper 2.)
Some key proposals :
Requiring a greater proportion of PSPs to hold an Australian Financial Services License (AFSL). Some PSPs which were previously not required to hold an AFSL - e.g. certain remittance service providers relying on pre-existing exemptions - would, under the proposals, likely be captured.
Payment functions to be listed and covered by separate AFSL authorisations.
The intention is to capture service providers which enable cross-border payments into and out of Australia.
Requiring major stored value facility (“SVF”) issuers holding in excess of $100 million to be authorised by the Australian Prudential Regulatory (APRA).
The above proposals largely mirror overseas developments (including in the UK and EU), where the regulatory perimeter for PSPs has been gradually expanding.
How Gen Advisory can help
Gen Advisory’s experienced ex-APRA regulators Michael Lukman and Clement Fernandez are currently helping several PSPs in Australia navigate the above regulatory proposals. Michael and Clement have also previously successfully helped several PSPs apply for and obtain AFSLs.
If you’re a PSP wishing to understand the implications of the above regulatory proposals for your business, including whether your business needs an AFSL, please email michael.lukman@gnad.com.au and clement.fernandez@gnad.com.au.
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