With cash disappearing, there is plenty of opportunity for fintech companies.
The future cashless economy promises opportunities for fintech companies.
Australia is set to be an almost cashless society by 2020, promising benefits for fintech.
Since 2010, cash payments have declined a staggering 46 percent, and now make up less than 10 percent of all payments, according to new research by East & Partners Australia.
The report’s findings dovetail with a 2015 study by Westpac, which found that 80 percent of Australians expect cashless transactions will soon be the norm.
“The merchant payments market in Australia is undergoing a period of extraordinary change,” said Martin Smith, Head of Markets Analysis at East & Partners.
“There are going to be even greater opportunities for Australian fintech companies.”
The hope for fintechs is that as payments go digital and the data supply increases, so too will demand for new technologies. It will also improve Australia’s attractiveness to foreign investors.
“Australians are very educated, very financial and very tech savvy. This helps make Australia an innovation hub in the region.
“What’s also interesting about a cashless economy is the innovation you can put around digital payment and what activity you can automate.”
As an example of how this has happened in the past, Ms Szetho cites Tyro Payments, the Australian fintech given the contract to handle Medicare payments and went on to revolutionise how they were made.
While the move to a cashless economy may be cheered by fintechs, not everyone is happy.
Writing in The Guardian, the economist Philip Soos denounced a cashless economy as empowering the security state and the banks.
“Given the growth of the surveillance state and intelligence-industrial complex, this is a real infringement upon freedom and privacy if the authorities access this bank data.
“This policy is also designed to generate inefficiency by forcing dependence on the banking and financial system.”
There was no evidence provided that the government was making consumers to use debit cards. Australian banks have not been lobbying for a cashless economy.