The federal government has flagged its intention to increase protections for consumers who make purchases using mobile phones, buy now, pay later services and cryptocurrencies.
Concerns have been raised in light of the recent collapse of two cryptocurrency trading exchanges, the proposed acquisition of Afterpay by American fintech firm Square inc., and reports from the financial counselors of Australia noting that these services are ‘sending people into a debt spiral’.
BNPL services such as Afterpay and Zip have surged in popularity as a result of the pandemic and increased online spending with over 6 million active accounts across the 6 largest platforms in Australia.
Details of the legislation and what particular regulations will be undertaken are unknown at this stage, however, the treasurer said ‘Without reform, Australian businesses and consumers could increasingly transact in environments that are largely unregulated from an Australian perspective, with any rules in play instead determined by foreign governments and large multinationals, including tech giants.’