The number of Australian fintechs has more than doubled since 2017 with over 800 firms now in the market while investment in the sector has reached $2 billion.
According to KPMG, investments in the fintech sector was $2 billion in 2020, a rise of 250% on the previous year.
“This data shows the Australian fintech sector has not only a large variety of players with cutting-edge technological solutions but also strong growth and the ability to attract global investments,” KPMG said.
Most of the firms were consolidated in the payments space as two factors in Australia had created a “fertile ecosystem” for these businesses.
These were the fact that most payments in Australia were completed electronically and that Australians were accustomed to using advanced payments systems with their banks.
Only 27% of payments in Australia were transacted with cash, falling to 5% for those aged 19 to 39, compared to 73% in the Eurozone.
“This has resulted in the creation of fertile ecosystems for the proliferation of payment companies,” KPMG said.
“Australia, in the coming years, has the potential to lead the world in payment technologies. Some examples of successful Australian companies in the sector are Tyro Payments, Afterpay and Zip.”
Other sectors which stood out were SME lending, digital banking, and blockchain and cryptocurrency.