What Is a Stored Value Facility Under Australia's Payments Reform?

Key takeaways

• Today, a non-cash payment facility is a financial product that generally needs an Australian financial services licence, with ASIC relief for low-value facilities, gift facilities and prepaid mobile facilities.
• Australia's payments reform would replace purchased payment facilities with stored value facilities (SVFs), with obligations graduated by size and by whether the provider holds customer funds.
• Treasury released exposure drafts on 9 October 2025 and 12 March 2026; consultation on the March 2026 package closed on 9 April 2026.
• The draft Payment Entities (Prudential Regulation) Bill 2026 makes providers above a threshold set in rules major SVF providers under APRA oversight.
• The same draft treats relevant payment service money as held in trust and requires it to reach a covered account by the end of the next business day.

What are the key facts on Australian SVFs?

Stored value facilities are the products, such as wallets and prepaid accounts, that the reform brings into a single licensing framework with graduated obligations by size and activity.

How are stored value products regulated today?

As non-cash payment facilities needing an Australian financial services licence, unless ASIC relief applies.

The explanatory statement to ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211 explains that the Corporations Act treats a non-cash payment facility as a financial product, so its issuer normally needs a licence authorisation. The instrument, as made in 2016, gave conditional relief to low-value facilities where the amount available to any one person does not exceed $1,000 and the total across the class does not exceed $10 million, and to non-reloadable gift facilities and prepaid mobile facilities. Firms should check the current version of ASIC's relief. Separately, the Payment Systems (Regulation) Act 1998 regulates purchased payment facilities, and the Parliamentary Library's bills digest notes that holding stored value of a purchased payment facility without authorisation or exemption is an offence under section 22, with a maximum penalty of 200 penalty units.

What does the reform change?

It replaces the purchased payment facility concept with stored value facilities and payment instruments regulated through financial services licensing.

On 9 October 2025 the Assistant Treasurer released exposure draft legislation setting up a core licensing regime for payment service providers and a graduated framework for SVFs, naming prepaid accounts, stablecoin issuers and wallets that hold customer funds as examples. Obligations are tailored to size and type: a wallet that only passes payment instructions to a bank faces lighter rules than one that holds customers' funds. The release said a further tranche would cover additional licensing obligations including safeguarding of payment-related money, exemptions, unclaimed money, APRA supervisory powers and a mandatory ePayments Code. A further exposure draft package followed on 12 March 2026, with consultation closing on 9 April 2026.

This sits alongside the Treasury Laws Amendment (Payments System Modernisation) Bill 2025, introduced on 30 July 2025, which amends the Payment Systems (Regulation) Act to create a framework for designating special payment systems and to update penalties. Our guide to the payments licensing reform timeline tracks each step.

Which SVF providers would APRA supervise?

Major SVF providers, defined by total stored value across the group above a threshold set in rules.

Under section 12 of the exposure draft Payment Entities (Prudential Regulation) Bill 2026, a person is a major SVF provider if the total of amounts credited to its regulated facilities, together with those of related bodies corporate, is more than the amount specified in the rules. The Minister makes those rules after consulting APRA and ASIC. The draft borrows the meanings of stored value facility and tokenised stored value facility from the Corporations Act, so stablecoin-type products issued as tokenised SVFs fall within the same structure. Treasury's December 2023 consultation proposed that major SVFs, including major payment stablecoin SVFs, be locally incorporated to be authorised by APRA, and that SVFs be prohibited from paying interest on stored funds.

How would SVF money be safeguarded?

Held in trust for end users and paid into a covered account by the end of the next business day.

Part 5, Division 3 of the prudential exposure draft deals with relevant payment service money. Section 45 treats money held for an end user as held in trust for that end user. Section 46(1)(d)(i) generally requires the money to be paid into a covered account by the end of the next business day, with eligible accounts described in section 46(2) and interest on the account treated as covered money. Section 42 allows other safeguarding methods unless APRA determines the entity must not use them, and section 52 deals with a guaranteed redemption period. Because these are exposure draft provisions, the numbering and detail may change before any bill is introduced.

In practice, the draft combines two protections already familiar from other regimes. The trust gives end users a claim on the money itself if the provider fails, and the covered account requirement sets a deadline for moving money out of collection and operating accounts. A provider that today sweeps customer money weekly, or leaves it in an operating account to fund settlements, would need to change its flows, and would need a daily reconciliation that shows, for each day, how much was received, how much reached a covered account and whether anything missed the next-business-day deadline.

Where do payment stablecoins fit?

Issuing and redeeming a payment stablecoin would be regulated under the SVF framework.

Treasury's December 2023 consultation described a payment stablecoin as a digital representation of value intended to hold a stable value against a fiat currency, issued by a payment stablecoin issuer and redeemable for Australian dollars, with closed-loop arrangements excluded. It proposed that issuance and redemption be regulated under the SVF framework, while trading by third-party intermediaries would fall under the separate digital asset facility framework. The 2026 prudential exposure draft carries this through with its references to tokenised stored value facilities.

What about providers that do not hold customer funds?

They would face lighter obligations than providers that hold money, because they never have customer funds to protect.

The October 2025 release gave the example of a wallet that only passes payment instructions to a bank, which would face lighter rules than a wallet that holds customers' funds. For safeguarding, the distinction is decisive: a provider that never receives or holds end users' money has nothing to place in trust or a covered account, while one that holds balances overnight needs the full set of controls. Providers should map each product's money flows now, because the classification will drive both licensing and safeguarding. A product that holds money only briefly, for example while a card payment settles, still holds money and should be mapped as such.

How does the proposed SVF regime compare with Asia-Pacific neighbours?

It moves Australia towards the trust-based models already used in Singapore and Hong Kong.

Our guides to MAS safeguarding of relevant money and Hong Kong SVF float give the detail.

How would the next-business-day rule work in practice?

Each day's receipts must reach the covered account by the end of the following business day, so a missed daily sweep becomes a breach within one day.

Worked example. A wallet provider receives customer top-ups into a collection account and sweeps them to a covered account once a day. Its receipts over one week, and the latest placement date under the draft rule, are shown below.

Wednesday's sweep failed and was caught up on Friday, so A$5.6 million sat outside the covered account for a day longer than the draft allows. A daily reconciliation of collection and covered accounts against the customer ledger would show the gap on Thursday, in time to fix it the same day.

What should Australian SVF providers do now?

These steps prepare for the reform without waiting for the final law or the rules that set thresholds.

• Classify each product: SVF, payment instrument or payment service, and whether it holds customer funds.
• Check current ASIC licensing and any relief relied on, including value thresholds.
• Measure total stored value across the group, as the major SVF test would.
• Map flows from collection accounts to accounts that would qualify as covered accounts.
• Build daily reconciliation of customer balances to safeguarded money.
• Review whether any product pays interest or interest-like rewards on balances.
• Track introduction of the bills and the rules that will set thresholds.

How does Safeheld help?

Safeheld reconciles customer ledgers, collection accounts and safeguarding accounts every day by entity and currency, so late sweeps and gaps show up as breaks.

It produces prepared report packs for ASIC FS70 and FS71, which the licensee reviews and completes. See daily reconciliation.

Frequently asked questions

What is a stored value facility in Australia?

Under the reform, a payment product that lets a customer store value with a provider and use it later, such as a prepaid account or a wallet holding customer funds. It replaces the purchased payment facility concept.

Do stored value products need a licence today?

A non-cash payment facility is a financial product, so its issuer generally needs an Australian financial services licence, unless ASIC relief applies, for example to low-value or gift facilities.

What is a major SVF provider?

Under the draft Payment Entities (Prudential Regulation) Bill 2026, a provider whose total stored value, with related bodies corporate, exceeds an amount specified in rules made after consulting APRA and ASIC.

How would SVF customer money be safeguarded?

The draft treats relevant payment service money as held in trust and generally requires it to reach a covered account by the end of the next business day.

Are stablecoins stored value facilities?

The reform covers stablecoin issuers within the SVF framework, and the draft prudential bill refers to tokenised stored value facilities.

Is the SVF regime in force?

Not on the latest published information we could confirm, which showed the SVF framework at exposure draft stage, with consultation on the March 2026 package closing on 9 April 2026. Check the Parliament of Australia website for introduction and passage.

Who would supervise SVF providers?

ASIC for licensing and conduct under the Corporations Act, and APRA for major SVF providers above the threshold set in rules, with the RBA keeping its payments system role.

Will SVFs be able to pay interest?

Treasury's December 2023 consultation proposed prohibiting SVFs from paying interest on stored funds; the final position depends on the legislation.

References

• Assistant Treasurer, New legislation to modernise the regulation of payment service providers (9 October 2025)
• Treasury, Payment Entities (Prudential Regulation) Bill 2026, exposure draft (PDF)
• Parliament of Australia, Bills Digest: Treasury Laws Amendment (Payments System Modernisation) Bill 2025
• Treasury, Payments System Modernisation: Regulation of payment service providers, consultation paper (December 2023, PDF)
• ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211, explanatory statement (legislation.gov.au, PDF)

About Safeheld

Safeheld is reconciliation and regulatory financial control software for regulated firms that hold client money. For Australian payment and stored value providers it reconciles customer ledgers to collection and safeguarding accounts every day, ready for the reform's safeguarding rules as they are finalised. To discuss your safeguarding operations, contact us at safeheld.com/contact.

This article is general information on Australian payments regulation and is not legal or regulatory advice.