Fintech & Digital Finance Lawyers Australia

What licences does a fintech company need in Australia?

Fintech companies in Australia may need an AFSL (for dealing in or advising on financial products), an ACL (for credit activities), AUSTRAC registration (for remittance or digital currency exchange) and compliance with the Payment Systems (Regulation) Act if operating a payment system. Regulatory sandbox exemptions and authorised representative arrangements may provide alternatives.

What are design and distribution obligations (DDO) for fintech products?

Design and distribution obligations under the Corporations Act require issuers and distributors of financial products to design products that are appropriate for their target market, prepare target market determinations (TMDs), monitor product distribution and report complaints and significant dealings outside the target market to ASIC.

What is open banking and how does it affect fintech in Australia?

Open banking in Australia operates through the Consumer Data Right (CDR), allowing consumers to share their banking data with accredited data recipients. Fintech companies can apply for CDR accreditation to access banking data, enabling them to offer comparison services, personal finance management and innovative financial products.

What regulatory sandbox options exist for fintech in Australia?

ASIC's enhanced regulatory sandbox allows eligible fintech businesses to test certain financial services and credit activities for up to 24 months without holding an AFSL or ACL, subject to prescribed conditions including consumer exposure limits and mandatory dispute resolution membership. The sandbox is available for testing innovative financial products, and participants must notify ASIC before commencing and comply with ongoing reporting obligations. This framework enables fintech startups to validate their business model while managing regulatory costs during the early stages of operation.

Do buy now pay later providers need an ACL in Australia?

Historically, many buy now pay later (BNPL) providers operated under an exemption from the National Consumer Credit Protection Act 2009, as their products were structured to avoid meeting the definition of a credit contract. However, the Australian government has introduced reforms to bring BNPL products within the regulatory framework, requiring providers to hold an Australian Credit Licence (ACL) and comply with responsible lending obligations. BNPL providers must now assess the suitability of credit arrangements for consumers and meet ASIC's design and distribution obligations.