Melbourne-based fintech payments platform iSignthis Australia Pty Ltd has been refused Consumer Data Right accreditation by the ACCC.
Between November 2020 and December 2021, iSignthis was known as ISX Financial Pty Ltd. iSignthis is a wholly owned subsidiary of Southern Cross Payments Ltd, which until November 4, 2022, was a public company listed on the ASX.
Prior to a name change in May 2022, Southern Cross Payments was known as iSignthis Ltd.
CDR, is also known as open banking, and gives consumers the right to safely access data about them, held by data holders and direct the information to be transferred to accredited third parties, potentially to access new products and services including better deals on everyday products and services.
Open banking is an economy-wide reform being rolled out sector by sector and has already been implemented in banking and energy. CDR is designed and overseen by the Australian government and independent regulators to ensure it is safe and secure for consumers.
The ACCC said it was not satisfied iSignthis would be able to comply with the obligations of an accredited data recipient (ADR) under the CDR Rules.
“ We refused to accredit iSignthis because we were not satisfied on the material before us about iSignthis’s data security protections, insurance and whether it is a fit and proper person to be accredited, ” ACCC Commissioner Peter Crone (pictured above) said.
Crone said under the CDR, ADRs can use consumers’ data – with a consumer’s consent – to provide them with useful products and services.
“A high degree of data security is one of the most fundamental requirements of being able to join the CDR,” he said. “The ACCC was not satisfied, however, that iSignthis had demonstrated it would be able to comply with the information security requirements, as required by the CDR Rules.”
The ACCC said it also had regard to a number of matters in relation to its assessment of whether it was satisfied that iSignthis was a fit and proper person to be accredited.
“The ACCC takes its role as the Data Recipient Accreditor in the Consumer Data Right system very seriously,” Crone said. “We are acutely aware of the importance of making sure that only businesses who can satisfy us that they can meet their CDR obligations get access to consumer data.”
This is the first time the ACCC has refused to accredit a company seeking to be an accredited data recipient in the CDR.
Investor website Market Index reported Southern Cross Payments angered its shareholders after announcing it would de-list off the ASX following a 30-month-plus court battle with the ASX.
Market Index said in late 2019, the company had trading in its shares suspended by the ASX.
The open banking system was launched in Australia two years ago but not all consumers are comfortable with sharing their personal data, according to research from fintech Zepto.
Meanwhile, Finsure brokers will be the first brokers in Australia to access open banking as Trusted Advisers under the CDR.
