Where things stand
The reforms are being introduced in stages. On 9 October 2025, the government released Tranche 1a exposure draft legislation, Treasury Laws Amendment Bill 2025: Payments System Modernisation - Amendment of the Corporations Act 2001 (Bill), which establishes the foundations for the new payments licensing framework in the Corporations Act 2001 (Cth) (Corporations Act).
The reform package (Tranche 1 as a whole) proposes to introduce amendments that will:
Bring key payment products and services into the Australian financial services licensing (AFSL) regime.
Empower APRA to set prudential standards for major stored value facility (SVF) providers and certain designated PSPs, with SVF providers becoming APRA-regulated if the total credit across their SVFs exceeds $200 million (group aggregate basis). Major SVF providers must register with APRA and comply with prudential standards but are not treated as ADIs or required to be licensed by APRA.
Introduce a rule-making power for the Minister to make a mandatory ePayments Code to set baseline consumer protections across the ecosystem.
Introduce new requirements to safeguard payment-related money held by AFSL holders based on the client money regime in the Corporations Act, but with adjustments to apply effectively for money that is being held in, or transferred through, SVFs, payment instruments and payment services.
Streamline the management of inactive and dormant money in major SVF accounts, aligning obligations with those for banks regarding unclaimed money.
On 12 March 2026, exposure draft legislation was released for consultation. The consultation period closes on 9 April 2026.
Interaction with other reforms
On 30 July 2025, the government introduced the Treasury Laws Amendment (Payments System Modernisation) Bill 2025 to the House of Representatives. The Bill was passed by both Houses of Parliament and received Royal Assent on 19 September 2025. Read our insight on the payment system modernisation reforms here.
On 25 September 2025, the Australian Government released exposure draft legislation aimed at regulating operators of platforms that hold digital assets on behalf of customers. This draft bill similarly introduces new categories of financial products and includes definitions of key concepts, such as "digital token", which is directly relevant to the proposed new financial products under the PSP reforms (particularly tokenised SVFs). Read our insight on digital assets licensing here.
What’s next
Consultation on the exposure draft legislation for Tranche 1 closes on 9 April 2026.
The government aims to introduce a single Tranche 1 package in 2026, followed by consultation on subordinate legislation and further Tranche 2 considerations (including access and industry standards).
Back to Regulation in Motion main page
This article was originally published on 20 October 2025 and updated on 13 March 2026.