This article was published on Capital Brief on 1 May 2025.
Payments innovation in Australia is at a crossroads. Over the past decade, we’ve made strong progress as a nation—investing in world-class infrastructure like the New Payments Platform (NPP) and launching bold initiatives like the Consumer Data Right (CDR). But if we truly want to be world leaders in tech-driven productivity in the financial services sector, we cannot afford to lose momentum now.
The industry’s rapid evolution is both a point of pride and a source of challenge. Fintechs across the country are driving new ways to move money—faster, more securely, and with greater transparency. These advances have benefited businesses and consumers alike, helping position Australia as a contender in the global fintech race.
However, the sector now faces a widening gap between the pace of technological change and the speed of regulatory adaptation. Delays in critical reforms, lingering regulatory uncertainty, and outdated procurement practices are beginning to stifle the potential of local innovators. It is an issue not just for startups and scale-ups, but for the health and competitiveness of the entire Australian economy.
As the federal election approaches, the fintech industry is calling for urgent action from policymakers—regardless of which party forms government—to ensure we get this right. There are three core areas that require immediate attention if Australia is to retain its standing as a fintech leader and deliver on the promise of a digital-first economy.
Proportionate access to core infrastructure
First, there must be a level playing field when it comes to accessing foundational payment rails, particularly the NPP. Historically, restrictive licensing and access requirements have limited non-bank players’ ability to compete, dampening innovation and keeping costs high. Reform is overdue.
The introduction of Common Access Requirements (CARs) is a welcome proposal that could transform the ecosystem. By defining risk-based thresholds for access, these reforms would encourage competition while maintaining safety and efficiency. It’s essential that the next government moves swiftly to implement these changes, ensuring that all responsible and qualified fintechs can contribute to the nation’s payments infrastructure.
Moreover, the lack of clear, fit-for-purpose regulation is undermining the confidence of fintechs to invest in new products, scale their operations, or hire talent domestically. What’s needed is a smarter licensing regime—one that matches regulatory requirements to the actual activity and risk involved, rather than taking a one-size-fits-all approach.
Such targeted regulation would enable genuine innovation, protect consumers, and empower homegrown fintechs to compete globally. Other markets have demonstrated the effectiveness of agile, responsive regulatory frameworks, and while Australia need not mimic them outright, we can certainly learn from their decisiveness and clarity.
Government must lead by example
As the nation’s largest processor of bulk payments, the public sector’s choices have a profound impact on adoption and innovation. Transitioning government payments to real-time rails like the NPP, building services powered by the CDR, and piloting projects in partnership with Australian fintechs would not only modernise public payments but also create valuable use cases, drive adoption, and spur further investment.
Equally important is procurement reform. Current frameworks tend to favour incumbents, often at the expense of smaller, more agile technology providers. By updating contracting processes to be more inclusive and reflective of the competitive advantages offered by local fintechs, government can ensure better services for Australians while supporting job creation and regional economic growth.
The risk of inaction
Australia’s fintech sector has grown from a $250 million industry in 2015 to over $45 billion in 2023—a remarkable achievement by any measure. But this success is no guarantee of future prosperity. Protracted delays on key reforms—whether in payments licensing, digital asset regulation, or the next phase of the CDR—are creating a policy vacuum, and political inertia threatens to erode our hard-won gains.
Other countries are moving with intent, crafting regulation that is both robust and flexible—encouraging innovation and investment while safeguarding consumers. Every delay in Australia sends a clear message to entrepreneurs and investors: certainty may be found elsewhere.
The ingredients for continued leadership in fintech are already here—world-class infrastructure, extraordinary talent, and a vibrant community of innovators. What’s needed now is decisive action from the next government: finalise reforms, provide a clear roadmap, and foster a policy environment that matches our industry’s ambition.
Australia has the opportunity to define the next era of payments innovation. The question is whether we will seize it—or watch as the momentum shifts offshore. For the sake of consumers, businesses, and the national economy, the answer must be action.
The author
