ASIC launches new electronic payments code for online businesses

The country’s financial watchdog has released a new version of the country’s electronic payments code, with the old version failing to take into account the myriad of ways consumers now pay for products on different devices.

The Australian Securities and Investments Commission has launched the new voluntary code today, alongside development partner PayPal, urging businesses to get on board after the 18-month transition period.

The new code includes changes such as a regime to resolve mistaken internet banking payments, requirements for low valued products, and English drafting that is “product and technology neutral”.

Adrian Christie, spokesperson for PayPal, says the previous code was drafted before the advent of more sophisticated online payments and failed to take into account technological innovation.

“Since the EFT code was first drafted, we’ve had the web come on board; we’ve gone beyond just using PINs. There are a myriad of ways you can pay for even your coffee. You can buy things on your phone now,” he says.

“What we advised was how to keep protections in place for payments of all types, and ASIC has drafted a code that captures that concept.”

The new code contains provisions to help protect customers from technological mishaps. For example, when a consumer loses a phone and the finder authorises some payments, the code mandates the consumer won’t be liable for those transactions.

“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,” it says.

In a statement, ASIC commissioner Peter Kell said the new code “is an important tool in the regulation of electronic payment products in Australia”.

While Christie says the code is completely voluntarily, the popularity of payments made from a variety of devices makes it more compelling for businesses to sign up.

“For businesses, it’s all about making sure you have recourse for consumers,” he says.

“If monies go missing or astray somehow, if the customer is not at fault in any sort of way, the code means consumers are protected with regard to both their money and their rights.”

Online businesses can check out the code here.