There's never a dull day on the financial market. What was considered normal yesterday has become obsolete today.
Australian cash payments are on a steep downward trajectory. In 2019, 32% of all payments were in cash and the number was halved by 2023, leading to more than $1 billion in debit charges made by various payment processors along the way.
This impressive amount is attributed mostly to Visa (NYSE:V) and Mastercard (NYSE:MA) as they compose for over 90% of the local card users. To help alleviate these step costs and help ordinary users with their financial stability, Australia's government plans to ban debit card surcharges in 2026 for non-cash payments.
With ample time, credit card providers and payment processors will have time to adapt. What's challenging news for businesses is great news for credit card users, as they will have more funds to spend online for shopping and entertainment.
The entertainment industry could see an upsurge due to lower prices as card processing fees could go down or disappear, as they will also have to compete against cryptocurrencies.
Online casinos are already adapting, and local players can use offshore online casinos in Australia, which accept credit cards and cryptocurrencies. And traditional payment means are certainly not having an easier time, as crypto continues to pressure them from all sides.
As cryptocurrencies are decentralized, they don't fall under any jurisdiction and are not subject to payment processors. This leads to lower costs for buyers and sellers, and a faster transaction period.
To survive, payment and card providers of today will have to adapt. And we can see innovation happening in the public sector as they try to fuse with crypto.
Utilizing the bonuses of blockchain and smart contacts, Citi Treasury and Trade Solutions (TTS) are making something new for institutional clients, where they will have constant liquidity, cross-border payments, and automatic trade solutions.
By creating tokenized deposits, TTS and its system aim to bring all of the benefits of crypto, without the flaws of it not being centralized.
This innovation will benefit their crypto clients and help bring in new ones, as Citi's global New York uses smart contacts to upgrade the trading and financial capabilities of all involved.
Lastly, UK Revolute is diligently working on improving transaction security and preventing APP fraud, among all other types.
Over 9000 complaints have been filed during 2023, which may not seem much, but it still puts Revolut ahead of the competition.
As Revolut states, they've managed to reduce the overall number of frauds for their clients by over 20% leading to over $600 million in losses prevented. Meta is the worst offender, where over 60% of complaints and fraud reports come from the Metas platform.
Revolut and Meta are working together to improve the overall transaction security as the costs and damage caused by malicious attacks continue to pile up.
This UK challenger bank is setting the standard for others to follow so that all users and participants in the financial market can operate in a safe environment. Fraudulent attempts can never be zero, and by following Revolut's example, we can get close to the universal goal of a regulated financial market.