Saranga Sudarshan, Research Analyst, ICT Practice, Frost & Sullivan Australia & New Zealand says decentralization of the payments network will allow Fintechs to offer convenient and competitively priced payment solutions.
Sudarshan says new EFTPOS and online charging solutions will permit more credit card payments to merchants at a reduced cost of receiving payments. From 2016, digital payments will have steady revenue growth with the segment forecasted to be worth AUD1.897 billion by 2020.
Frost & Sullivan’s study, Fintech in Australia – Trends, Forecasts and Analysis 2015 – 2020 suggests as Apple and Google develop stronger ties with banks, they could bypass Visa and MasterCard’s global payments network. If Apple and Google expand their payments system beyond NFC and mobile apps, and enter online payments, Paypal’s online payments system will be threatened as customers will prefer integrating their mobile and online payment method under one system.
Smartphones allow the possibility of completely digital banks to operate internationally without any physical branches. Mobile applications are developed to be the sole platform for mobile banking and investment tools.
About 60% of the top 100 finance apps are Fintech and 100 most downloaded free financial apps; 65 on the Australian Google Play Store and 54 on the Australian Apple App Store, were for services offered by companies that are not established banking or investment firms. Mobile payment apps include PayPal, PayPal Here, Square Register and Woolworths Money.
Cryptocurrencies (CRCs) such as Bitcoin or XRP offer anonymity, accessibility and an unregulated low cost model payment method. The value of one Bitcoin grew 314.41% (CAGR) from 2011 to 2015; however this growth has been underlined with a high degree of volatility. With high volatility, low merchant acceptance and consumer confidence and no integration of cryptocurrency transactions into the settlement system of Australia’s new payments platform, coupled with security of an individual’s cryptocurrency wallet remaining a long-term issue with increasing levels of cybercrime, mainstream adoption is unlikely over the forecast period.
Key players in the digital payments segment include BitPOS, Coinjar, iDats, Tappr and Tyro Payments.
Frost & Sullivan predicts that these companies are poised for strong growth; with the next goal for Fintechs in the digital payments segment being to grow existing revenue streams.
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