Non-Cash Payment (NCP) Facilities: A Complete AFSL Guide for Australian Fintech & Payment Platforms

Introduction

Digital wallets, payment apps, remittance platforms, stablecoin products and embedded payment features can all bring a fintech within Australia’s financial services licensing regime. The key question is not the technology being used, but whether the arrangement allows a person to make payments without physically delivering cash.

Where a payment arrangement is a non-cash payment (NCP) facility, providing financial services in relation to it can require an Australian Financial Services Licence (AFSL), unless an exclusion or specific relief applies. In this article, we explain how NCP facilities are regulated, which fintech models are commonly affected, the main exclusions and ASIC relief available, and what payment businesses should review before launching or changing a product.

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NCP Facility Framework

Statutory Definition

Under Section 762C of the Corporations Act 2001 (Cth) (‘Corporations Act‘), a “facility” can include intangible property, an arrangement, or a combination of the two.

Section 763A(1)(c) then provides that a facility through which, or through the acquisition of which, a person makes non-cash payments is a financial product, subject to the statutory exclusions.

A person “makes non-cash payments” under Section 763D(1) where they make, or cause to be made, a payment otherwise than through the physical delivery of Australian or foreign currency notes or coins. The Act itself gives examples including direct debit facilities, cheques, purchased payment facilities and travellers’ cheques.

The definition is intentionally broad. It can potentially capture modern payment mechanisms even where the underlying technology looks very different from a traditional card or banking product.

Payment Arrangement, Not Just Technology

The distinction between the regulated facility and the technology supporting it was central to ASIC v BPS Financial Pty Ltd [2024] FCA 457 (‘BPS Financial‘).

The Federal Court found that the BPS Financial arrangement was an NCP facility. The regulated product was the arrangement allowing users to make payments using Qoin—not simply the blockchain infrastructure on which those transactions depended. The client guide adopts the same arrangement-versus-technology distinction.

ASIC’s current digital asset guidance similarly explains that custodial or non-custodial digital wallets may constitute NCP facilities where users can use them to make payments to third parties. ASIC also considers that certain stablecoins are likely to be NCP facilities, depending on their terms and features.

The practical implication is that calling a product “software”, a “wallet” or a “crypto platform” does not determine its regulatory status. The actual rights, payment functionality and contractual arrangement need to be analysed.

Fintech and Payment Models That May Be NCP Facilities

Digital Wallets and Stored-Value Products

A wallet that allows customers to hold value and then use it to pay multiple merchants or other users is a common example of an NCP facility.

Potential examples include:

• standalone digital wallets;
• stored-value accounts;
• prepaid or reloadable payment products;
• marketplace wallets; and
• embedded wallets within larger apps.

Stored value is not, by itself, the statutory test. The critical issue is whether the facility enables the user to make non-cash payments and whether an exclusion or relief applies.

Remittance, P2P and Payment Features

Payment functionality can also arise within platforms whose primary business is not described as a wallet. For example, regulatory analysis may be required where a platform lets users:

• transfer funds to other users;
• pay multiple merchants;
• make international payments;
• pay bills through the platform; or
• maintain a balance that can later be spent.

A remittance or payment-processing business is not automatically an NCP issuer merely because it participates in a payment flow. Its precise role in the arrangement matters when assessing whether a fintech needs an AFSL.

This is particularly important for “super apps”. A social, commerce, or marketplace platform may have largely unregulated functionality but adding a wallet or peer-to-peer payment feature that independently attracts Chapter 7 regulation.

Crypto Wallets and Stablecoins

Digital asset payment arrangements require the same functional analysis. Following BPS Financial, a crypto wallet that creates an arrangement through which users can make payments to third parties can be an NCP facility. ASIC’s current guidance also states that digital assets themselves may sometimes constitute NCP facilities where they are designed and used as a store of value and means of payment.

The analysis therefore needs to distinguish between:

• the wallet or account arrangement;
• the underlying digital asset;
• the blockchain or technical infrastructure; and
• the particular financial services provided by the operator.

A single product ecosystem may contain more than one potentially regulated component.

AFSL Requirements for NCP Facility Providers

Providing Financial Services in Relation to an NCP Facility

An NCP facility being a financial product does not mean every person who touches the payment transaction automatically requires an AFSL.

Under Section 766A of the Corporations Act, a person provides a financial service where, among other things, they provide financial product advice or deal in a financial product. Section 766C deals with what constitutes dealing, which can include issuing a financial product.

If a business carries on a financial services business in Australia, Section 911A(1) generally requires it to hold an AFSL covering the relevant financial services unless an exemption applies, so fintech and payment businesses should seek advice from Click Legal’s AFSL lawyers for fintech and payment businesses.

For a fintech, the licensing analysis should therefore identify:

• the financial product;
• who issues or otherwise deals in it;
• whether any advice is being provided;
• whether those activities constitute a financial services business; and
• whether an exclusion, ASIC relief or another licensing pathway applies.

Obligations After Licensing

Where an AFSL is required, obtaining the licence is only the beginning. The general licensee obligations in Section 912A of the Corporations Act can require appropriate compliance systems, competence, resources, risk management and representative supervision, depending on the business and applicable statutory qualifications.

Retail-facing NCP products may also engage disclosure and conduct requirements under Parts 7.7 and 7.9 of the Corporations Act, unless specific relief applies.

For a broader overview of those obligations, see Click Legal’s free AFSL Compliance Guide – Core Obligations for AFS Licensees.

Key NCP Exclusions and ASIC Relief

The Single-Payee Exclusion

One of the most important statutory exclusions appears in Section 763D(2)(a)(i) of the Corporations Act. A payment is not treated as a NCP for Chapter 7 purposes where it is made through a facility under which there is only one person to whom payments can be made.

This can be important for closed-loop facilities. For example, an app through which stored value can only be used to purchase goods from the one business operating the facility may fall outside the NCP definition.

By contrast, if the same balance can be spent with multiple independent marketplace sellers, the single-payee exclusion may no longer be available.

Whether separate stores, related entities or marketplace participants amount to one or multiple payees depends on the legal structure rather than simply the branding of the platform.

Low-Value NCP Facility Relief

ASIC provides conditional relief for low-value NCP facilities under Section 10 of ASIC Corporations (Non-cash Payment Facilities) Instrument 2026/167 (‘ASIC Instrument 2026/167‘).

A “low value non-cash payment facility” must satisfy all the following:

• no person may hold more than $1,000 available under facilities of the same class issued by that issuer at any time;
• the total amount available across all facilities of that class must not exceed $10 million at any time; and
• the facility must not be a component of another financial product.

Section 10 provides relief from specified licensing, conduct and disclosure obligations, including Section 911A(1) of the Corporations Act.

However, the relief is conditional. For retail clients, relevant conditions include clear disclosure of terms, fees, expiry, and procedures for unauthorised or mistaken transactions, access to balance and recent transaction information, and an internal dispute resolution process. Failure to satisfy applicable conditions can cause the exemptions to cease applying.

Low-value relief therefore means reduced regulatory requirements, not the absence of compliance obligations.

Loyalty, Gift and Road-Toll Facilities

The ASIC Instrument 2026/167 also retains specific relief for several lower-risk facilities.

For example:

• Section 7 declares qualifying loyalty schemes not to be financial products for Chapter 7;
• Section 8 excludes facilities used only for road-toll payments; and
• Section 11 provides specified relief for qualifying non-reloadable gift facilities.

Each category has its own definition and conditions. A business should therefore test the precise product against the instrument rather than assume that anything described commercially as a “gift card” or “loyalty scheme” is automatically exempt.

Credit Facilities and BNPL Products

Credit facilities are dealt with separately.

Under Section 765A(1)(h) of the Corporations Act, certain credit facilities are excluded from the Chapter 7 financial product definition. The exclusion also extends to an NCP facility where payments using that facility are all debited to a qualifying credit facility. This can be relevant to BNPL and other credit-based payment models.

However, the exclusion is highly sensitive to product design. If a credit platform later adds a wallet into which users can deposit their own funds and spend them with multiple parties, that wallet may require a separate NCP analysis even if the credit component remains outside Chapter 7.

Separate Australian consumer credit licensing and conduct requirements may also apply to the credit product.

Current Law and Upcoming Payments Licensing Reforms

The framework described above is the current Chapter 7 regime. ASIC Instrument 2026/167 preserves the existing NCP relief until April 2031, subject to ASIC revisiting it when broader payments reforms take effect.

Separately, Treasury is developing a modernised licensing framework for payment service providers. The proposed regime would use the AFSL framework for specified payment functions and introduce graduated obligations, including for stored-value facilities and payment stablecoins.

As at August 2026, those payment-service-provider reforms remain at the draft legislation and consultation stage and should not be treated as the current operative licensing regime.

Fintechs should therefore comply with the existing Corporations Act framework while monitoring the proposed transition separately.

Common NCP Compliance Mistakes

Common problems arise when businesses analyse the technology or commercial label rather than the underlying legal arrangement. Examples include:

• assuming a wallet is unregulated because it uses blockchain technology;
• assuming every payment processor is automatically—or never—an NCP provider;
• relying on the single-payee exclusion after adding third-pary merchants;
• relying on low-value relief without monitoring the $1,000 and $10 million thresholds;
• overlooking the conditions attached to ASIC relief;
• adding wallet functionality to an otherwise excluded credit product without reassessing the AFSL position;
• launching new payment features without checking the scope of an existing AFSL; and
• assuming a future payment-services reform removes the need to comply with current law.

The regulatory analysis should be repeated whenever the payment flow, permitted payees, stored-value functionality or commercial structure materially changes.

Practical Steps for Fintech and Payment Platforms

Before launching or materially changing a payment product:

• Map the payment flow. Identify who provides funds, where value is held, who can receive payments and what contractual arrangement enables the payment.
• Identify the financial product. Apply Sections 762C, 763A and 763D of the Corporations Act to the facility itself rather than only the underlying technology.
• Test all exclusions and relief. Review the single-payee exclusion, credit facility exclusion and current ASIC Instrument 2026/167.
• Map the financial services. Determine who issues, deals in or advises on the product and whether an AFSL covering those activities is required.
• Review the position before product changes. A new wallet, merchant network, P2P feature or stored-value component can materially alter the regulatory analysis.

Existing licensees can also use Click Legal’s free AFSL Compliance Checklist to review whether their licence scope and compliance systems remain aligned with their current services.

Conclusion

NCP regulation is broad because it focuses on the facility through which payments are made, rather than a particular technology. Digital wallets, stored-value products, crypto payment arrangements and embedded payment features can therefore fall within the same Chapter 7 framework as more traditional payment products.

For fintechs, the safest approach is to analyse the payment architecture before launch and revisit it whenever functionality changes. An exclusion or ASIC relief may remove the need for an AFSL in some cases, but those pathways are fact-specific and often conditional, so contact Click Legal’s AFSL lawyers for advice on fintech licensing and exemptions before relying on them.

Frequently Asked Questions