Australian Buy Now Pay Later (BNPL) company Afterpay believes that using cryptocurrencies can help local merchants reduce payment costs.
In a submission to the Senate investigation into “Australia as a Technology and Financial Center,” Afterpay stated that using blockchain-based transactions would lower the fees associated with traditional payment methods such as card issuers, network operators and bank fees:
“Merchants benefit significantly from the cryptocurrency model, as the card network fees are completely eliminated from the equation and the customer / payer bears the transaction costs.”
With the crypto model, the customer would bear the costs of validating the payment on the blockchain. This can be either relatively cheap or expensive, depending on which cryptocurrency and blockchain the transaction is being carried out with or how congested a network is at a given point in time.
Should such a scenario arise, Afterpay stated that transaction fees would be transparent and customers would have the option of “waiting for better network conditions and lower costs” before making transactions.
The research examines a wide range of factors related to financial technology, such as the economic and employment opportunities of crypto and blockchain technology, barriers to new technology adoption, and the impact of company law restricting new investments in Australia. Afterpay will address the Senate Committee today (September 8th).
While BNPL competitor Zip has outlined plans to offer crypto trading services to its Australian and US clients, Afterpay has not yet announced any plans to work with digital assets. However, crypto-friendly payment company Square acquired Afterpay as part of a $ 29 billion stock deal announced Aug. 1 that could use the company to enter the space in the future.
In its submission to the Senate, Afterpay stated that it “does not currently offer any crypto-related products”, but is actively “considering” how innovative fintech functions could work as part of the alternative financial platform.
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Stablecoins down under
On the subject of stablecoins, Afterpay stressed that the Australian government should work with the crypto sector to consider what “an optimal environment for an AUD-backed stablecoin should look like”.
According to Afterpay, the goal should be to provide stablecoin users with protection regarding the asset, but regulate it so that it doesn’t stifle fintech innovation in Australia.
“This includes considering whether regulatory tools are required for stablecoin issuers to have transparent and adequate regulatory reserve stocks, consumer-centric data protection and fair and engaging processes for blacklisting accounts,” it said.