i want to go for Fintech like mobile wallet and mobile payments. do I need AFSL?

[Peter]

i want to go for Fintech like mobile wallet and mobile payments. do I need AFSL?

[Paul Derham]

Hi Peter,

Thanks for your question.  You will require an AFSL if you carry on a financial services business in Australia.  Under the Corporations Act 2001 (Cth) (“the Act”), a financial service includes:

• providing financial product advice to clients;
• dealing in a financial product;
• making a market for a financial product;
• operating a registered scheme;
• providing a custodial or depository service; or
• providing traditional trustee company services.

It is important to consider the design of the wallet, as this will determine whether it is considered a “financial product” under the Act, and whether a “financial service” is being provided by the wallet issuer.

However, a mobile wallet will generally be considered a non-cash payment facility, that is, it is likely to allow payments, or cause payments to be made, otherwise than by physical delivery of Australian or foreign currency in the form of notes and/or coins.

Non-cash payment facilities are regulated by the Act and require an AFSL, unless ASIC grants relief or certain exemptions apply.  Relief is currently extended for:

• loyalty schemes;
• road toll facilities;
• non-cash payment facilities used for third party payments;
• low value non-cash payment facilities;
• gift facilities;
• prepaid mobile facilities; and
• travellers’ cheques.

For further information on the conditions of relief please see ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211.

Please feel free to contact our Financial Services Team for further assistance.

Author: Paul Derham

Co-contributor: Greta Walters

Keep an eye out for the launch of our new Sydney office on Martin Place in July 2016!!  We are very excited about this opportunity to service our Sydney clients.

 

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