Payments Licensing – Regulatory Reform Roadmap

On 12 March 2026, Treasury released the full Tranche 1 draft legislation for the proposed new regulatory framework for payment service providers (PSPs). This draft legislation incorporates the changes previously proposed as part of the Tranche 1a legislation released in October 2025 (and reflects feedback received from the Tranche 1a consultation) as well as setting out the additional reforms that were flagged to follow in early 2026.

The proposed reforms seek to modernise Australia's payments regulatory framework. The emergence of new technologies and business models in recent years means the current framework, which has remained largely unchanged since its introduction in 2001, is no longer considered fit for purpose.

This is a significant reform for the payments industry, which will impact the AFS licensing perimeter (with new definitions of regulated payments products/services and amended, narrowed or removed exemptions). Specific obligations will apply to PSPs (in addition to the existing general licensee obligations) and certain PSPs will also be APRA-regulated.

Click below to download the DLA Piper regulatory reform roadmap to help you understand the key changes proposed under Tranche 1.

Consultation on the Tranche 1 legislation closes on 9 April 2026.

The DLA Piper team has significant experience advising payments and fintech businesses, and in supporting clients to navigate substantive regulatory reform. Please contact our team if you would like to discuss what these reforms may mean for your business.