Unlocking Growth: How Fintech Payment Solutions Empower Small Businesses
REPORT

Unlocking Growth: How Fintech Payment Solutions Empower Small Businesses

clock

31.01.2025 - 06:33

FinTech

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. Of the $9 billion in net benefits, $8 billion has come from increased revenues by adopting these services, and $1 billion from reduced costs. Notably, over 30% of businesses reported an increase in revenue of over 2.5% as a result of adopting a fintech payment solution.

Australia’s evolving payment landscape: five key trends shaping the future

Australia’s payment system has seen rapid and remarkable change over the past decade. Driven by technological innovation and a desire for cost-effective solutions, merchants across the country are rethinking how they accept and process payments. Below are the five key trends reshaping the payments space:

  1. Rapid Adoption of Mobile Wallets
  2. Entry of Fintech Payment Service Providers (PSPs)
  3. Introduction of Real-Time Payments Through the New Payments Platform (NPP)
  4. Exponential Growth of Buy-Now-Pay-Later (BNPL) Platforms
  5. Rise of Fintechs for Cross-Border Payments

portableText image

Moving beyond traditional banks

The shift away from traditional banking providers is largely due to a need for broader services, cost efficiencies, and cutting-edge payment solutions. In fact, approximately 39% of surveyed merchants reported switching from one of the Big-4 banks to a non-bank provider. This trend underscores the growing appeal of Fintech offerings, which often provide more user-friendly services than legacy banks.

portableText image

Fintech payment solutions are widely used by small businesses across all size categories. ‘In-person’ payment solutions have the highest penetration of all payment types. ‘A2A’ payment solutions have similar adoption rates across small business merchant sizes, largely due to the growing adoption of PayID. These A2A solutions offer merchants lower cost transactions and faster settlement.

portableText image

Benefits for Small Businesses

The transition to fintech payment platforms has especially benefited small businesses, with the average benefits across all fintech solutions totalling $9 billion as a result of their adoption:

  • Of this $9 billion, $8 billion is attributed to increased revenue, while $1 billion comes from cost savings.
  • Nearly 30% of businesses reported revenue growth exceeding 2.5% after introducing fintech payment solutions.

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.”

Overcoming Barriers to Adoption

Despite the clear advantages, some small merchants remain hesitant to go digital due to concerns about:

  • Security
  • Privacy
  • Setup or operational costs.

Addressing these issues is crucial for broadening fintech adoption. Enhanced education around cybersecurity, transparent cost structures, and strong support from payment service providers can help build trust and encourage more businesses to transition to digital methods.

Embracing the Future of Payments

For those merchants who have already embraced fintech solutions, the results are undeniable: higher customer satisfaction, reduced overheads, and increased revenue. As Australia’s payment landscape continues to evolve, staying informed and open to innovative platforms could be the key to thriving in an increasingly competitive market.

Read the full report here.

Read our latest posts

Unlocking Australia's R&D potential
TechnologyWorkforceEconomicsInnovationProductivityR&D

Unlocking Australia's R&D potential

Our research in collaboration with Atlassian, the BCA and Cochlear sets out a path forward for Australia to realise its R&D potential. Australia’s productivity growth is at a 60-year low, driven in part by declining business investment in R&D. Our latest report highlights the critical role large businesses play in Australia’s innovation ecosystem and the urgent need for policy reform. Despite strong talent and institutions, Australia underperforms global peers due to high costs and uncompetitive incentives. The report outlines six targeted reforms - including simplified R&D tax incentives and a commercialisation premium - that could together generate $7.7 billion in annual economic output and lift productivity by 0.1%, with a fiscally neutral impact. With the Strategic Examination of R&D underway, this is a pivotal opportunity to restore Australia’s innovation edge.

28 Jul, 2025

Digital platforms and competition in Australia
CompetitionTechnology

Digital platforms and competition in Australia

Our latest research in collaboration with Apple examines proposals to introduce an ex ante competition framework for digital platforms in Australia by assessing digital platform regulations in international jurisdictions. We find that jurisdictions that have implemented ex ante regimes have experienced implementation challenges, with consequences for users and the economy. This study highlights that the need for regulatory regimes to preserve the benefits delivered by platforms while maintaining the flexibility to adapt to rapidly evolving technologies.

24 Jul, 2025

Climate Risk Index for the European Energy Sector
ClimateEnergy transition

Climate Risk Index for the European Energy Sector

Mandala Partners in partnership with Zurich Resilience Solutions has produced Europe's first comprehensive Climate Risk Index for renewable energy infrastructure across five major European markets. This groundbreaking analysis reveals the scale of climate vulnerability facing Europe's clean energy transition and provides actionable insights for building resilience across France, Germany, Italy, Spain, and the UK. Nearly half of Europe's renewable generation capacity is in critical climate risk categories, threatening the foundation of the continent's energy security and economic stability.

16 Jul, 2025

Shock Resistant
Workforce

Shock Resistant

Shock Resistant outlines novel insights into the ways that platform workers in the US used platform work as a strategy for mitigating the impacts of the pandemic and cost of living crisis.

2 Jul, 2025

Loading...