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By adopting a comprehensive strategy to update systems and regulation, Australia is positioning itself to have a safe, effective and scalable payments infrastructure that can adapt to technological advances and evolving consumer behaviour.
The country is systematically modernising its payments ecosystem, responding to technological developments and shifting consumer habits while ensuring its infrastructure remains fit for purpose in a digital economy.
In September 2025, the received royal assent, marking a significant milestone in regulatory reform. The legislation expands the payments regulatory framework to encompass new and emerging payment systems and participants, including digital wallets, buy now pay later (BNPL) services and crypto-asset payment facilitators.
It also introduces new ministerial powers to designate payment systems in the national interest, alongside new civil penalty provisions and higher maximum penalties for certain criminal offences.
Australia’s finance minister, Daniel Mulino, that the goal of the law is to make the country’s payments system more seamless, safer and stronger, thereby supporting economic productivity.
“These changes are another important step in delivering a modern, world‑class and efficient payments system in Australia. A safer, more trusted and more accessible payments system will help boost competition, innovation and productivity across the economy,” he added.
Earlier in September, the Australian Securities and Investments Commission (ASIC) released a report on its regulatory simplification efforts, noting that it had eliminated more than 9,000 pages of regulation since the beginning of the year.
The regulator added that it had improved access to regulatory information through a redesign of its website. Its focus on clarity and accessibility reflects its recognition that firms require agility to navigate compliance requirements in a rapidly evolving payments landscape.
Further developments
Building on the September legislation, on October 8, 2025, the government launched a consultation on the exposure draft of a new regulatory framework for payment service providers (PSPs).
The consultation, which remains open until November 6, 2025, represents the first tranche of a multi-phase reform programme.
The draft establishes core concepts underlying the framework and the overarching licensing obligations for PSPs. Key elements include:
- Revised definitions that capture modern payment services.
- New provisions enabling ASIC to obtain information for PSP investigations.
- A core licensing regime setting clearer obligations for providers performing specific functions.
- A graduated regulatory framework for stored value facilities, including prepaid accounts, stablecoin issuers and digital wallets holding customer funds.
- Updated regulatory reporting and disclosure requirements.
According to : “The reforms allow a more agile regulatory system that tailors obligations to the size and type of providers.”
The second tranche of draft legislation, expected in 2026, will address common access requirements and industry standard-setting mechanisms.
Strategic priorities
In a on October 24, 2025, Michele Bullock, governor of the Reserve Bank of Australia (RBA), outlined four key areas of the country’s digital payments system where further innovation is required:
- Modernising the account-to-account (A2A) payment system.
- Enhancing cross-border payments.
- Combating fraud and scams.
- Strengthening operational resilience.
On A2A payments, Australia plans to decommission its Bulk Electronic Clearing System (BECS) by the end of the decade. Unlike the New Payments Platform (NPP), operational since 2018, BECS lacks real-time, 24/7 processing capabilities and the ability to include rich payment data.
On cross-border payments, the RBA is collaborating with industry to implement new data standards and infrastructure that will make international transfers faster, cheaper and more transparent. These improvements align with broader global efforts to modernise cross-border payment systems.
On fraud, as criminal tactics evolve, Australia continues adapting its defences. One example is the migration to quantum-resistant encryption, with the Australian Competition and Consumer Commission (ACCC) granting authorisation for AusPayNet to migrate the country’s card payments system to the Advanced Encryption Standard (AES).
On operational resilience, the RBA is examining how interconnections between systems can exacerbate outages and assessing how its settlement infrastructure must evolve to accommodate new forms of digital money, including potential central bank digital currencies (CBDCs).
In her speech, Bullock emphasised that “innovation and resilience are not opposing forces – they can, and should, reinforce one another”.
Research and innovation
Earlier in 2025, the Australian Payments Network (AusPayNet) and Australian Payments Plus (AP+) conducted extensive consultations on the future of A2A payments, gathering industry perspectives to inform the transition from BECS.
Separately, the RBA and the Digital Finance Cooperative Research Centre are progressing Project Acacia, a joint research initiative exploring how different forms of digital money could facilitate wholesale tokenised asset markets in Australia.
The project demonstrates Australia's commitment to understanding emerging technologies before implementing regulatory frameworks, focusing on resilience, compliance and customer protection in tokenised settlement environments.
The future of the Australian payments system
Australia's approach to payments modernisation demonstrates a deliberate balance between fostering innovation and maintaining system stability.
Rather than imposing prescriptive rules, authorities are prioritising consultation, testing and prototyping to ensure regulatory frameworks evolve alongside market developments.
The government's multi-tranche legislative approach enables iterative refinement based on stakeholder feedback. ASIC's regulatory simplification efforts complement these reforms by making compliance requirements clearer and more accessible, particularly for smaller and emerging PSPs.
For PSPs, the reforms signal clearer obligations and a more predictable regulatory environment. The graduated framework recognises that a one-size-fits-all approach is inappropriate for an ecosystem ranging from major banks to fintech startups.
The focus on operational resilience, fraud prevention and cross-border payments addresses genuine industry challenges while supporting Australia's deeper integration into global payment networks.
The reforms position Australia as a leader in balanced payments modernisation, but other jurisdictions may chart different courses.
For example, the UK, which has an established regulatory framework and open banking infrastructure, could respond either by aligning with Australia's graduated approach or by doubling down on its current model of prescriptive competition remedies and mandatory data sharing.
As the reforms unfold over the coming years, Australia should be well-prepared for continued evolution in how consumers and businesses transact in an increasingly digital economy.
It may also provide a test case for whether collaborative regulatory development can match the pace of technological change.
