ASIC has today published a report, Report 718: Response to submissions on CP 341 Review of the ePayments Code: Further consultation (REP 718), on updates to the ePayments Code (the Code).

REP 718 follows the release in May 2021 of Consultation Paper 341 Review of the ePayments Code: Further consultation (CP 341), which sought feedback on proposed updates to the Code.

ASIC’s review, which will be reflected in an updated Code published later in 2022, is intended to  provide clarity (and remove ambiguity) in specific  areas, as well as enhancements to some of the existing protections. The Code will also be modernised – most notably, by extending the Code to payments made using the New Payments Platform.

“Although the updated Code will not address or resolve every issue raised with us through the consultation, this interim refresh will target a range of key issues with the Code to support its ongoing relevance and effectiveness, pending the Government’s broader consideration of a mandatory Code” said Commissioner Sean Hughes.

“This includes taking into account significant developments in technological innovation and preserving the intention for  the Code to be  simple to apply and easy to understand.”

ASIC’s report also relates primarily to updates in the following areas of the Code:

• compliance monitoring and data collection;
• mistaken internet payments;
• unauthorised transactions;
• complaints handling; and
• facility expiry dates.

ASIC will work on updating the Code to reflect the final positions in REP 718. ASIC will now undertake a short and targeted consultation with some key stakeholders on the technical wording of the changes, with the aim of publishing an updated Code in April 2022.

Subscription to the Code is voluntary, but the Government has accepted several recommendations to mandate the Code, most recently in 2021, when the Government responded to Treasury’s Review of the Australian Payments System. ASIC will assist with the Government’s work on a mandatory Code, by providing insights from our current review.

“ASIC’s aim is to address a selection of key issues now, in the context of this review, ahead of the Government’s proposed further work to produce a mandatory Code,” said Commissioner Hughes.

Next steps

During March 2022, ASIC will begin engaging with a range of key stakeholders (e.g. Code subscribers, consumer representatives, fintechs, and relevant industry associations) to request their feedback on the technical details of a draft updated Code.

Our present aim is to publish an updated Code in April 2022. A transition period of 12 months will apply.

Download

• Report 718: Response to submissions on CP 341 Review of the ePayments Code: Further consultation (REP 718)
• The ePayments Code
• List of current Code subscribers

Background

The ePayments Code provides important consumer protections in relation to electronic payments, including ATM, EFTPOS, credit and debit card transactions, online payments, and internet and mobile banking. For example, there is a general principle in the Code that banking customers will not be liable for unauthorised transactions on their accounts if they have taken reasonable steps to protect their accounts. The Code also sets out a process for banking customers to get help from their financial institution in retrieving funds they have mistakenly paid to the wrong person.

Most banks, credit unions and building societies in Australia, as well as a small number of other providers of electronic payment services, subscribe to the Code. 

ASIC is responsible for administering the Code, including reviewing it. The most recent comprehensive review of the Code was completed in December 2010. 

The Government has accepted recommendations to mandate the Code. In 2021, the Government responded to Treasury’s Review of the Australian Payments System. The Government agreed with the Review’s recommendation for the Code to be mandated for ‘payments licensees’ (a new form of licensee also recommended by the Review). The Government stated that it would commence consultation in early 2022 to determine how the Code should be updated and brought into regulation.