Hi Dan,
Thank you for your question.
Non-cash payment products are facilities through which payments that do not involve the physical delivery of currency in the form of notes and/or coins are made. This includes, but is not limited to, providing for direct debit of a deposit account or the use of cheques.
‘Low value’ non-cash payment facilities are non-cash payment facilities which satisfy all of the following criteria:
- The total amount available for making non-cash payments under all facilities of the same class issued by that issuer and held by any person at any one time does not exceed $1,000;
- The total amount available for making non-cash payments under all facilities of the same class issued by that issuer does not exceed $10,000,000 at any time; and
- The facility is not a component of another financial product.
Persons providing financial services in relation to low value non-cash payment facilities are exempt from certain licensing, conduct and disclosure obligations. It is important to note that those who rely on the exemptions must follow an alternate set of obligations. This includes taking reasonable steps to provide clients with a disclosure document setting out certain information about the facility before or at the time of the service being provided.
ASIC’s Regulatory Guide 185 sets out further information regarding low value non-cash payment facilities, as well as the relevant exemptions and alternative obligations.
Please feel free to contact our Financial Services Team for further assistance.
Authors: David Court (Partner) and Nicolette Tan (Legal Clerk)
