This includes buy now pay later services, crypto and digital wallets. However, limited access to industry data may make it difficult to properly enforce regulations.
Non-bank payment companies now account for more than half of merchant acquiring and are expanding at three times the pace of traditional banks. Major card networks such as Visa and Mastercard dominate the credit and debit card markets. At the same time, EFTPOS’s market share has dropped sharply from 96% in 1995 to just 32% in the past year. These changes reflect how Australian banks have aligned themselves with international card companies, diminishing the presence of local systems. A recent global outage has shown how fragile this increasingly digital infrastructure has become.
The sector generates significant earnings. Companies like Stripe, Square/Afterpay and Amex brought in more than $4 billion in revenue but paid only $75 million in tax. This gap has made it harder for Australia’s tax system to keep up. There are now around 81 million debit cards handling $635 billion in transactions a year, while the 14.7 million credit cards in circulation process $334 billion annually. Digital wallets are also growing fast, with $305 billion in payments recorded. Regulators face a situation similar to that in other countries: large foreign players dominate the market but offer little detailed visibility into their operations.
The RBA, under a governor with deep experience in payment systems, must now manage the risks of a growing fintech landscape without sufficient market transparency and while continuing its broader economic duties. Unless access to real-time data improves, regulation may remain reactive rather than forward-looking.
