Afterpay Says Senate Inquiry Crypto Could Lower Merchant Payment Costs

Australia’s Buy Now Pay Later (BNPL) Afterpay company believes local merchants can reduce payment costs by using cryptocurrencies.

In a submission to the Senate inquiry into “Australia as a technology and financial hub,” Afterpay said the use of blockchain-based transactions could reduce fees associated with traditional payment methods, including card issuer, network operator and banking fees:

“Merchants will benefit significantly from the cryptocurrency model, as the card network fees are removed from the equation entirely and the customer / payer bears the transaction costs.”

Under the crypto model, the customer would bear the cost of validating the payment on the blockchain. This can be relatively cheap or expensive depending on the cryptocurrency and blockchain the transaction is made with or how congested a network is at any given time.

If such a scenario were to occur, Afterpay said transaction fees would be transparent and customers would have the option to “wait for more favorable network conditions and lower cost” before making transactions.

The survey studies a wide range of fintech-related factors, such as the economic and employment opportunities posed by crypto and blockchain technology, barriers to the adoption of new technologies, and the impact of corporate law. restrict new investment ”in Australia. Afterpay will speak to the Senate committee later Wednesday.

While BNPL’s competitor Zip has outlined its intention to offer crypto trading services to its clients based in Australia and the United States, Afterpay has yet to reveal its intention to work with digital assets. However, the crypto-enabled payments company Square acquired Afterpay in a $ 29 billion stock purchase transaction announced on August 1, which could see the company enter space at the to come up.

In its Senate submission, Afterpay noted that it “does not currently offer crypto-related products” but is “actively examining” how innovative fintech features might work under the platform. alternative financial.

Related: Australia, Singapore, Malaysia and South Africa launch joint CBDC pilot project

Stablecoins below

On stablecoins, Afterpay stressed that the Australian government should work with the crypto industry to determine what an “optimal environment framework for an AUD-backed stable coin” should look like.

According to Afterpay, the goal should be to provide stablecoin users with protections over the asset but to regulate it in a way that doesn’t stifle fintech innovation in Australia.

“This includes determining whether regulatory instruments are necessary for stablecoin issuers to have transparent and adequate prudential safeguards, consumer-focused data protections, and fair and appealable account blacklist processes.” , did he declare.

Norman D. Briggs