COMMITTEES

Mr KENNEDY (Cook) (12:13): by leave—Firstly, I'd like to acknowledge the chair and the whole committee with how this inquiry was conducted. It was good to see bipartisanship is alive and well in this parliament, and, on such an important issue as the payments sector, I think the chair has shown great leadership as well as the whole committee in getting to an aligned report.

I fully support all the recommendations in the report, as does the rest of the committee. For most Australians, payments are often invisible. They're not transparent.

We just tap a phone. We tap a watch. We pay a bill.

We order online. We expect it to be instant, safe and cheap. But behind that simple tap is a complex web—a system involving banks, card schemes, digital wallets, technology companies, fintechs, merchants, regulators, consumers and a lot of concentration of market power.

The question for this parliament is simple: is this system delivering the best outcome for Australian consumers and Australian businesses? Australia has always been an early adopter and innovator of payments technology. We embraced tap-and-go.

We embraced online banking. We embraced real-time payments. We embraced mobile wallets.

We have had some of the best fintechs in the world come from this country. Apple, Google and Samsung offer three of the main pass-through mobile wallets in Australia. The Reserve Bank reported that these three companies' share of all credit and debit transactions in Australia grew from 10 per cent in March 2020 to over 45 per cent by the end of 2025.

That's in just four years. It's an extraordinary shift in growth. When almost half of card transactions are flowing through mobile wallets controlled by three global technology companies, we're no longer talking about a niche product; we're talking about essential economic infrastructure.

Of them, Apple is by far and away the strongest player. When infrastructure becomes essential, access matters, competition matters and costs matter. For small businesses all around the country and in my electorate of Cook—in San Souci, Caringbah, Miranda, Kirrawee and Sutherland—these payment costs are not theoretical.

A local café, a local retailer, one of the thousands of tradies in my electorate, the many health providers around Caringbah and Miranda—these family businesses don't have unlimited margins, and they are getting squeezed. Every cost and every fee matters. Every instance of lack of competition matters.

Every restriction on routing or access eventually lands in the cost of doing business. Consumers across this country and across my electorate also deserve choice. They deserve security, privacy and convenience and should be able to use the payment method that works best for them, not simply the one favoured by the device maker or the credit card scheme partner.

That's why recommendation 8 is one of the most important in the report. It says 'that the Australian Government consider whether to require, through regulatory intervention similar to that undertaken by the European Union, that Apple permit access to its near field communication and secure element technology without requiring developers to enter commercial arrangements'.

Apple has built an excellent product. Millions of Australians use Apple products because of its product excellence, and they use Apple Pay. It's easy, secure and convenient.

This isn't about punishing Apple for its success. This is not about undermining innovation. The question is whether Apple should be able to control the core technology that allows competitors to offer alternative wallet products on equal terms.

On an iPhone, the tap-and-go experience is heavily controlled by Apple. It gives Apple enormous power over the mobile payments ecosystem. If a bank, fintech or payments provider can build a better wallet, a cheaper wallet, a more merchant-friendly wallet or a more consumer-friendly wallet, it should have a fair opportunity to compete.

The EU has already moved on this issue and has recognised that access to near-field communication technology is fundamental to competition in mobile payments. Australia should be exploring similar approaches. Firstly, we've called on the ACCC to conduct a broader review into Apple's market power in digital payments and recommend policy options that deliver greater competition and consumer benefit.

The question is this: what is the market power? What are the barriers to entry? What are the fees and terms?

What are the reforms that would deliver better outcomes for consumers and small businesses right across Australia? Secondly, any policy recommendations should be mapped against the real benefits for Australians, small business and consumers. This debate should not be a fight between banks and big technology companies where everyone else is forgotten.

The purpose of reform is not to give one group of large corporations more leverage over another; the purpose is to lower costs and provide more choice, better products, stronger privacy, stronger security and more innovation. Too often, small businesses sit at the end of the payments chain. They don't design the schemes.

They don't set the fees. They don't control the wallet infrastructure. They simply pay the bill.

Thirdly, we need to improve the usability of the PayTo and New Payments Platform. The New Payments Platform is one of Australia's most important pieces of payment infrastructure. PayTo has the potential to make account-to-account payments easier, faster and more transparent.

But good infrastructure is not enough. The user experience needs to work, and it needs to be improved. If PayTo is confusing, inconsistent or hard to use, adoption will lag.

That is why the Treasury or the RBA should look at the PayTo network and set standards for user experience of PayTo. We need this to be user friendly, and the banks have to come to the party. The consumer should not need to understand the payments architecture to make a good choice.

A small business should not need a consultant to access lower cost payment rails. Fourthly, Australia must move faster on stablecoins. Stablecoins are developing extremely rapidly in other jurisdictions.

Australia doesn't need reckless adoption, but we do need a clear framework, and we need it now. Treasury should establish a framework within six months for enabling stablecoins as an alternative payment rail in Australia. If we wait until these systems are fully developed overseas, we will have missed the boat, missed the economic opportunity, and will be forgoing Australia's leadership in fintech and payments.

We'll be rule takers, not rule makers. Australian innovators will be forced to build around standards designed somewhere else and, even worse, will be using foreign companies. We need to encourage Australian stablecoin providers and have them lead the world, not watch them go overseas and send jobs overseas.

So we're looking to Treasury, the RBA and everybody to take a lead role in this, with ASIC as well. Finally, the updated strategic plan for Australia's payments system should expressly include agentic commerce. AI agents will increasingly be used to search, compare, negotiate and transact on behalf of consumers and businesses.

It's already happening. So this raises serious questions about consent, authentication, liability, privacy and dispute resolution. This payments system needs to be ready for the future, and Australia must lead and not be left behind.

The central point is this: payments regulation cannot be backward looking. It cannot only regulate yesterday's payments system. It must anticipate where technology is going and enable Australian businesses to innovate.

The future of payments should be open, competitive, secure and built around the interests of consumers and small businesses. If we can do that, I'm confident Australian payments companies will lead the world. This is the test of this reform, and I commend the report to the House.

The DEPUTY SPEAKER ( Mr Georganas ): The member for Chifley?