Afterpay Says Senate Inquiry Crypto Could Lower Merchant Payment Costs

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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 center, Afterpay said using blockchain-based transactions would reduce fees associated with traditional payment methods, including card issuers, network operators and bank charges:

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.

In 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 choice 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 restricting new investments in Australia. Afterpay will speak to the Senate committee later today (September 8).

While BNPL Zip’s competitors have presented plans to offer crypto trading services to its Australian and US clients, 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 the space at the to come up.

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

Related: Australia, Singapore, Malaysia, 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 framework an optimal environment should look like for an AUD-backed stable coin.

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 needed to ensure that stablecoin issuers have transparent and adequate prudential reserves, consumer-focused data protections, and fair and appealable account blacklisting processes, a. he declared.

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