Payment service providers (PSPs), fintechs, and digital wallet issuers will need to meet new conduct, prudential, and consumer protection requirements under the government’s new proposed payment systems legislation.
Marking a significant update on how PSPs are regulated since the early 2000s, this move aims to modernise a fragmented, outdated system with overlapping regulators and unclear roles that created uncertainty.
“Our vision is for a modern, world-class and efficient payments system that is safe, trusted and accessible, enabling greater competition, innovation and productivity”, said Treasurer Jim Chalmers when announcing the government’s broader payments agenda.
This reform will make the ePayments code mandatory for the first time and will also provide the Australian Prudential Regulation Authority (APRA) additional supervisory authority over stored value facility (SVF) providers and bring PSPs under Australian Financial Services (AFS) licensing regime.
The consultation on the Tranche 1a payments regulation which cover core concepts, scope, and powers is open now. Tranche 1b (safeguarding detail, exemptions, unclaimed money, mandatory Code, transition) is planned to follow, with government aiming to introduce a consolidated package to Parliament in 2026.
Under the regulation, every part of the payment’s ecosystem whether they are fintechs handling cross-border transfers or banks running digital wallets, will now be regulated based on what they do and what risks they carry, not on who they are.
It’s a shift toward one consistent, activity-based framework that applies the same standards across the industry.
While the reforms are moving from consultation to implementation, firms will need increased regulatory visibility to stay ahead of changing requirements.
This is where FinregE can help by converting complex regulatory changes into structured, real-time intelligence that supports regulatory compliance.
What’s changing and why it matters
The payments legislation focuses on defining core payment concepts and aligning them with existing regulatory infrastructure. Here’s the essence of the new framework:
- Who’s in scope: An AFS license is now required for any organisation carrying out specific payment services, such as issuing digital wallets (SVFs), stablecoins (tokenised SVFs), operating payment gateways, collecting payments for merchants, or starting fund transfers. The licence requirement will only apply to corporate entities (constitutionally covered corporations).
- A new definition for payments: Clearer definitions are introduced by the law, such as payment technology and enablement service, payment initiation service, and payment facilitation service. These better reflect contemporary payment practices than the Corporations Act’s outdated “non-cash payment” concept.
- New prudential perimeter: Major SVF providers, or those with more than $200 million in stored value, as well as any PSPs that are considered systemically significant, will now be under the supervision of APRA. Additionally, smaller suppliers might choose to participate in APRA oversight, which increases customer confidence.
- Mandatory ePayments Code: The framework for consumer protection, which was previously optional, will soon be required by law. The Code would establish basic norms of behaviour for all PSPs and banks, as well as guidelines for illegal transactions and incorrect payments.
What firms need to do
Here are four ways payment services firms can begin ensuring compliance:
- Assessing scope: Determine which of the six regulated payment functions, including storing assets, enabling technology, facilitating transfers, or initiating payments, your company carries out.
- Gap analysis: Examine the new AFS and APRA regulations in comparison to your existing license and AML/CTF obligations.
- Operational preparedness: Create mechanisms for reporting, client money protection, and dispute settlement to satisfy upcoming AFS requirements.
- Disclosure and governance: Get ready for additional transparency requirements, particularly for tokenised SVF issuers that must release monthly reports on their reserve assets and liabilities.
As Assistant Treasurer Daniel Mulino recently summarised, “This is all about making our payments system more seamless, safer and stronger, and suitable for the times.”
Building a smarter future with FinregE
To be prepared, PSPs must do more than simply read the consultation; they must also interpret it, operationalise it, and quickly adjust when the final regulations are released.
FinregE assists businesses in navigating the complexities of the payment systems’ regulatory changes by using AI to transform regulatory texts into insights.
From draft to enforcement, compliance and product teams can remain in sync thanks to our regulatory intelligence platform, which includes:
- Targeted horizon scanning for Tranche 1a/1b, which is based on client-specific libraries that monitor PSP functions, SVF thresholds, and Code obligations. Alerts are sent out within hours of publication.
- AI Regulatory Insights Generator (RIG), an AI-powered tool that converts all exposure draft and explanatory material rules into clear-cut requirements, deadlines, and activities that are ready for internal review.
- Impact-assessment workflows that track progress, distribute responsibility across Product, Risk, Legal, and Engineering and keep an auditable record for Boards and regulators.
- Digital Rulebooks that compile exposure drafts, final Acts, rules, and the ePayments Code into a single, versioned library with tracked changes and cross-references.
- AI RIGMAPS, FinregE’s auto-mapping engine, which maps draft obligations to your existing policies, procedures, and controls, highlights compliance gaps, and even suggests remediation language.
When combined, these capabilities turn regulatory reform into a structured, collaborative process rather than a last-minute rush.
By bridging the gap between regulation and execution, FinregE enables PSPs to concentrate on what really matters: innovation based on trust.
Book a demo today.
