According to Afterpay, Australian merchants could greatly benefit if they transact using crypto. This will be opposed to the use of traditional credit and debit cards. It could effectively lead to the elimination of fees paid to credit card companies and banks.
The company recently made a submission to the senate inquiry of Australia as a Technology and Financial Center. In the submission, they outlined new plans to transform the payments industry. As of yet, banks are still trying to catch up with Afterpay’s services by launching their own buy now and pay later plans. However, Afterpay is looking to evolve to expand its position in the payments domain.
In a statement, Afterpay said that they don’t offer crypto-based products as of yet. Nevertheless, they are always considering new ways to innovate their financial management ecosystem. They explained how their customers always anticipate them to embrace the latest developments. This way, they can keep up with customers’ aspirations and needs. This is regardless of whether their needs meet the conventional definition of financial services and products.
Afterpay explained that crypto-backed transactions have the capacity to lower fees that traditional card networks set up. Moreover, it could replace processing fees, scheme fees, and interchange fees with one transaction fee. The sole transaction fee would only be needed to validate the payment on the blockchain.
The company emphasized that merchants stand to benefit from the crypto-based model. This is because it removes any card network-related fees from the equation. More importantly, the customer will have to pay the transaction costs. The fees would be made transparent to consumers, who will get various options. They can get the choice to wait for a lower cost and better network conditions.
Afterpay is also suggesting that Australia’s authorities develop favorable conditions to establish a stablecoin. An Australian stablecoin would share a link with the Asutralian dollar, giving it the same value. Additionally, it means that the coin won’t be subject to the same volatility as conventional digital currencies.
The payments company called upon the government to form a safe regulatory environment. This would allow the stablecoin tied to the Australian Dollar to provide a new world of investment options to users. Investors can now diversify their portfolio beyond precious metals such as gold.
In their statement, they recommended that the Australian government collaborate with the crypto industry. It’s certainly time to determine the ideal framework for a stablecoin backed by actual fiat currency. This process also involves seeing if stablecoin issuers will need regulatory instruments. They may need them for adequate and transparent reserve holdings, fair process with regard to blacklisting accounts.
The main goal for this is to give stablecoin buyers better protections for the value of their holdings. AT the same time, it will enhance Australia’s position as a worldwide fintech leader.
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