The federal government wants to address Apple and Google’s growing dominance of the Australian payment system. Here because.

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The Treasury appears set to grant itself new powers in an attempt to counter Apple and Google’s growing control over Australia’s payment infrastructure. Josh Frydenberg signaled a new campaign to take control of the payment system and force tech companies to comply with more regulation. “Ultimately, if we do nothing to reform the current framework, Silicon Valley alone will determine the future of our payment system, a critical piece of our economic infrastructure,” Frydenberg told AFR. The Australian government seems poised to open a new front on which to fight the big tech companies, looking at how Silicon Valley handles transactions worth billions of dollars every day.

According to the Australian Financial Review (AFR), treasurer Josh Frydenberg is looking for new powers that allow Canberra to dictate terms to companies like Apple and Google about how they manage their mobile wallets and how they cooperate with local financial institutions.

The move would help consolidate payment power in Canberra, effectively wresting control from the Reserve Bank of Australia (RBA). It would allow the Treasury to create new rules and force tech companies to abide by them. “Ultimately, if we do nothing to reform the current framework, Silicon Valley alone will determine the future of our payment system, a critical piece of our economic infrastructure,” Frydenberg told AFR.

It comes as politicians increasingly scrutinize the boundless influence of technology platforms in Australia, which are often subject to different regulations. The campaign is led by a parliamentary committee in “Mobile Payment Financial Services and Digital Wallet”.

Late last month, CBA chief Matt Comyn told the Committee it was “cause for concern” that Apple controlled 80% of the digital wallet payments market, calling for more local regulation of the $ 2 trillion company. .

At the heart of the feud is Apple’s Near Field Communication (NFC) chip, the technology that allows iPhone users to “touch and go.”

Without access to the chip, banks are forced to pay a fee to Apple every time a mobile payment is made through the iPhone’s mobile wallet. As mobile payments are a growing part of the payments market, it’s a deal that has frustrated incumbent banking operators.

Apple responded to the fire, stating in a Committee presentation that Comyn’s comments deliberately mis-characterize Apple’s business in an attempt to eliminate competitors.

“At the heart of some banks’ defense of open access to NFC is the pursuit of an anti-competitive model that is detrimental to the customer experience and opposition at fair and reasonable rates,” he wrote.

Likewise, Google exerts significant influence in the payments industry via its eponymous wallet.

Further reforms will be led by the Payments System Review, which has made 15 recommendations currently being evaluated by the Morrison government. Significantly, the review didn’t pull any punch when it came to criticizing the lack of market intervention by the RBA and other regulators, including its hands-on approach to the “buy now, pay later” (BNPL) space.

The conclusions open the door to a more proactive approach, with Canberra seemingly thinking it is in the best position to lead such an effort.

A series of recent battles to reduce Silicon Valley’s influence follows. The media bargaining code was finalized earlier this year in an effort to redistribute power within the local media landscape. Home affairs have meanwhile warned that Google and Amazon need to make sure they don’t help fund dangerous extremists.

The parliamentary committee on mobile wallets will continue with its public hearings on Thursday, when the Council of Small Business Organizations Australia (COSBOA) is expected to appear.

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