FinTech Australia launches its landmark report — Fintech payments innovation delivers $9 billion benefits to small businesses
Small businesses have been among the biggest beneficiaries of the transition to fintech-powered modern payments systems, with the average benefits across all fintech solutions totalling $9 billion as a result of their adoption.
The finding comes as part of a new report launched by economics, research and analysis firm Mandala in partnership with FinTech Australia, compiled using fresh research into small business and analysis of ABS data.
It serves as FinTech Australia’s first major report into the tangible impact the industry is having both on the country’s economy and business across Australia.
Of the $9 billion in net benefits, $8 billion has come from increased revenues by adopting the services, and $1 billion from reducing costs. Over 30% of businesses reported growth of over 2.5% after adopting a fintech payment solution.
In terms of their overall adoption, over half (56%) of small businesses leverage a fintech provider for in-person transactions. Meanwhile, a similar number (57%) of regional small businesses also leverage fintech payments solutions for payments over their major bank counterparts.
Rehan D’Almeida, CEO, FinTech Australia said: “This report finally quantifies the power of fintech to transform our economy.”
“We frequently hear that small business is the engine room of the Australian economy. Well, fintech is fuelling that engine room and directly contributing to its growth.”
“Through adopting new payment technologies, small businesses are not only reducing costs, which is what we expected, but are also growing their revenue. Its impact isn’t fully realised either, with only half of Australian small businesses leveraging these fintech solutions.
“With support, we can see fintech supercharge more areas of the small business ecosystem, further growing overall revenues and reducing costs.”
In addition to measuring its impact, the report also noted the key factors holding back broader fintech payment adoption: namely businesses’ concerns about perceived operational cost, security and privacy.
D’Almeida added: “In many instances, fintech solutions are safer and more operationally efficient than their counterparts. The data indicates that our key challenge for further growth is educating the broader SMB market.”
The report launches amid the RBA’s review of surcharging, where various data points from the Mandala report formed the basis for FinTech Australia’s submission.“While the surcharging model isn’t perfect, small businesses have built their businesses around these surcharging rules for two decades and would be disproportionately impacted by a ban.” D’Almeida said.
“We want to help the government get the balance right, and help make other digital surcharge-free methods of payment available to consumers. The surface-level solution of banning surcharging would be a heavy blow to small businesses, have knock-on effects for consumers, and undo the benefits the fintech sector is providing the overall economy.”
About FinTech Australia
FinTech Australia is the not-for-profit peak industry body for the Australian fintech sector, representing over 400 fintech companies and startups across the nation.
FinTech Australia’s vision is to make Australia the leading market for fintech Innovation and Investment by working with both sides of government, industry and the Australian fintech community to create a supportive environment and partner ecosystem in Australia and abroad.
