This page provides pointers to help you understand how the law might apply to your innovation.
Is your payment product a non-cash payment facility regulated by ASIC?
Payment products that are regulated by ASIC are known as ‘non-cash payment (NCP) facilities’.
A NCP is a payment not made through the physical delivery of Australian or foreign currency. Examples of NCP facilities include stored value cards, electronic cash and direct debit services.
Generally, if you provide services in relation to NCP facilities you will need to hold an AFS licence. This applies if you:
- ‘Deal in’ an NCP facility, such as product issuers; and
- Provide other financial services, such as financial advice.
However, there are some exemptions available – these are outlined below. Depending on the service you provide, you can comply with the law by being an authorised representative of a licensee.
There is a range of exemptions available for NCP facilities. These cover people who ‘deal in’ the NCP facility, as well as people who provide other services such as financial advice.
NCP facilities that do any of the following may be eligible for an exemption:
- Only allows payments to be made to one person
- Is an incidental component of another facility (or incidental to another facility) where the main purpose of the other facility is not a financial product purpose
- Only allows payments that are debited to a credit facility
- Provides certain one-off electronic funds transfers (e.g. transfers where there are no standing arrangements with you and your customers).
ASIC has also provided some other exemptions for certain products. For example, you generally do not need a licence to provide:
- Loyalty schemes
- ‘Low value facilities’ (where the maximum held by any one person is $1000 and the maximum held in total is less than $10 million)
- Non-reloadable products that are only marketed as gift facilities.
Detailed information on exemptions that apply to NCP facilities is available in Regulatory Guide 185 Non-cash payments facilities.
Your general obligations if you need an AFS licence
Your obligations will depend on the services you provide. For example, product issuers may need to:
- Give retail clients a Product Disclosure Statement (PDS) that contains sufficient information for them to make an informed decision about purchasing the product.
- Give retail clients specific ongoing disclosures about a financial product (e.g. informing NCP facility holders of material changes or significant events in relation to the NCP facility).
If you need an AFS licence you will need to meet certain general requirements relating to your organisational capacity, education and training levels, risk management systems and financial position. You must also comply with certain conduct and disclosure obligations. Refer to Regulatory Guide 104 Licensing: Meeting the general obligations and Regulatory Guide 168 Disclosure: Product Disclosure Statements (and other disclosure obligations) for more information.
For guidance about how to satisfy some of the other AFS general licensee obligations, see Regulatory Guide 165 Licensing: Internal and external dispute resolution and Regulatory Guide 166 Licensing: Financial Requirements and RG 181 Licensing: Managing conflicts of interest.
ASIC also administers the ePayments Code. We encourage all payment product issuers to consider signing up to this voluntary code. The ePayments Code regulates consumer electronic payment transactions, including ATM, EFTPOS and credit card transactions, online payments, internet and mobile banking, and BPAY.