Many in retirement are travelling comfortably, with three key factors contributing to their happiness – good physical and mental health and enough money to enjoy life.
Perhaps the assumption that markets are still anchored by predictable economic policies needs to be challenged. For the first time since the fall of the Berlin Wall, political volatility – once background noise – is potentially reshaping investment risk at a structural level.
New payment laws targeted at Apple, Afterpay (ASX:APT), Zip (ASX:Z1P)
Treasurer Josh Frydenberg is going to introduce new payment laws that could affect newer key players like Apple (NASDAQ: AAPL), Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P).
New payment laws
According to reporting by various media, such as the Australian Financial Review, the government is going to introduce laws that will regulate the various newer players in the payments space.
The idea is to include more services as a ‘payment service’ so that players like Apple, Afterpay and Zip are all playing by the same rules as local banks like Westpac Banking Corp (ASX: WBC) and Commonwealth Bank of Australia (ASX: CBA) with the Australian banks supposedly the ones that have funded the local payment infrastructure but are losing revenue to these newer tech businesses entering payments.
This is also to ensure that payment platforms can’t destabilise the financial system in the future, such as if a digital wallet system broke.
Around half of Aussies are now using mobile phones and digital wallets and the payment volume going through typical non-banks is rising quickly. The newspaper reported that there are more than 5 million active buy now, pay later accounts, which now account for around a fifth of online retail transactions in dollar terms.
The AFR reported that in a speech to the Australia-Israel Chamber of Commerce in Melbourne on Wednesday, Mr Frydenberg will say:
“Australia must retain its sovereignty over our payment system. Given the pace of change and those leading it, if we do not reform the current framework, it will be Silicon Valley that determines the future of our payments system.
“As more Australians utilise these technologies and invest in digital assets, it is important that a robust regulatory regime underpins their interactions.”
Cryptocurrency considerations
The government is also reportedly considering bringing in new regulations on cryptocurrency exchanges under regulations that’s similar to licensed financial service providers to ensure investors have a minimum level of protection.
It will also be considered whether Australia should adopt a central bank digital currency for regular/retail people.
Summary thoughts
With new payment platforms becoming bigger and bigger, it’s understandable that the government, RBA and incumbents want more regulation. As long as the regulation doesn’t worsen the current services, then hopefully there will no negatives to the move.
If I were a BNPL business, I’d be more worried about the possibility of merchants passing on BNPL costs to shoppers and big players entering the space.
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