ASIC advises consumers to check which providers are following new best practice
The ePayments Code has taken full effect, formally taking over from its predecessor, the Electronic Funds Transfer Code (the EFT Code), following an 18 month transition period.
The ePaymentsCode provides a best practice consumer protection regime for electronic payments.
ASIC Commissioner Peter Kell said: ‘The ePayments Code builds on the EFT Code and addresses emerging issues in the rapidly changing electronic payment market. Consumers who deal with subscribers to the ePayments Code can be confident they will be protected if things go wrong.’
Changes to the Code include:
- a new regime to resolve mistaken internet banking payments
- tailored requirements for low value products (up to a maximum balance of $500); and
- plain English drafting that is product and technology neutral, making the Code applicable to all consumer electronic payment products.
The Code continues to be universally supported by the banking and mutual sectors. Some providers of newer payment products, including PayPal Australia, are also demonstrating their commitment to consumer protection by subscribing to the Code.
Jeff Clementz, Managing Director of PayPal Australia, said: ‘PayPal Australia is proud to have worked closely with ASIC on the development of the new ePayments Code and to be one of the first industry signatories. The Code reflects a progressive approach to regulation aimed at promoting payments innovation alongside consumer protection.
‘Our consumers are regularly accessing their digital wallet via a range of connected devices. This demonstrates how technology is driving rapid change in consumer behaviours in regards to payments. The new ePayments code is a dynamic code which acknowledges these technology advancements and demonstrates ASIC’s commitment to protecting consumers,’ Mr Clementz said.
‘We are pleased to see the increase in Code subscription, particularly by new subscribers who did not previously subscribe to the EFT Code. The Code is an important tool in the regulation of electronic payment products in Australia. We will continue to push those who offer consumer electronic payment products to subscribe to the Code,’ Commissioner Kell said.
How the ePayments Code may protect consumers
The Code stipulates how subscribers should conduct themselves when dealing with their customers. Subscribers must warrant that they will comply with the Code in the terms and conditions they give to consumers.
The following examples illustrate how the Code may apply to protect consumers:
- when a consumer loses a mobile phone and the finder of the phone uses mobile payment applications on the phone to make purchases or transactions without authorisation, the consumer will not be liable for these transactions if the payment provider is a subscriber to the Code;
- when a consumer inadvertently transfers money to the wrong recipient because they enter the wrong BSB or account number details, the Code provides a process to help them recover their money;
- consumers who use low value products must be provided with a way to check their balance and transaction history.
Consumers should check if the banking or payment service provider that they are dealing with is a Code subscriber by:
- checking the list of current Code subscribers with ASIC; or
- checking the product’s terms and conditions.
Background
The ePayments Code was released in September 2011 (refer: 11-205MR).
List of current Code subscribers