By Sarah Ainslie Catallus The banks are taking a gamble, one that could prove costly.
The Government is launching a new digital payments system, which will allow banks to accept online payments for a fee, without the need to be registered with ASIC.
In the meantime, the Australian Financial Market Operator (AFMCO) will be providing the banks with information on what payments are accepted, when and to whom.
The regulator will also be able to check that payments are authorised by the Financial Conduct Authority, which is responsible for enforcing the law around money laundering and financial crimes.
As a result, customers who have a bank account will not be required to be authorised by ASIC to make online payments.
Instead, they will need to enter the relevant PIN number and other details.
Under the new system, the AFMCO will have the power to require a bank to confirm a customer’s PIN number with the authority before they can make payments.
The new system is designed to speed up transactions, and it will be a major step forward in the Australian banking industry, which has struggled to find ways to keep customers online.
The AFMCo is expected to release a final draft of the new rules later this year, but the regulator said it will make the changes after reviewing the information it receives.
The rules will require banks to register with the AFSO as well as with ASIC, allowing them to confirm customers’ identities and their PINs and verify whether they are authorised to make payments through the system.
The changes are expected to make the system easier to use, with a greater range of services and a clearer flow of payments between banks.
The Federal Government is set to introduce its own digital payments scheme later this month, with the new payments system to be rolled out by the end of March.
Topics:consumer-finance,financial-market,industry,bankers-and-credit-unions,digital-money,australiaFirst posted April 18, 2020 13:17:20Contact the writer