Australian buy now pay later (BNPL) firm Afterpay believes that local merchants tin can slash payment costs by utilizing cryptocurrencies.

In a submission to the Senate inquiry into "Australia every bit a Technology and Fiscal Middle," Afterpay stated that the utilize of blockchain-based transactions could cut the fees associated with traditional payment methods, including card issuer, network operator and banking fees:

"Merchants stand to benefit considerably from the cryptocurrency model, as card network fees are entirely removed from the equation and the customer/payer bears the transaction costs."

Under the crypto model, the customer would front the cost of validating the payment on the blockchain. This could either be relatively cheap or costly depending on what cryptocurrency and blockchain the transaction is conducted with or how congested a network is at any given time.

If such a scenario were to play out, Afterpay stated that transaction fees would be transparent, and customers would be granted the choice to "wait for more favorable network conditions and a lower toll" before making transactions.

The research is investigating a broad range of factors related to financial applied science, such every bit the economic and employment opportunities posed by crypto and blockchain tech, barriers to the uptake of new technologies, and the impact of corporate law "restraining new investment" in Australia. Afterpay will be speaking before the Senate committee later on Wednesday.

While BNPL competitor Naught has outlined plans to offer crypto trading services for its Australian and United States-based customers, Afterpay is yet to reveal any plans to piece of work with digital assets. However, crypto-friendly payments firm Square caused Afterpay in a $29-billion stock bargain announced on Aug. 1, which could run into the house enter the space in the hereafter.

In its submission to the Senate, Afterpay noted that information technology "does not currently offering crypto-related products" simply is actively "considering" how innovative fintech features could function as a part of the alternative financial platform.

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Stablecoins downwards under

On the topic of stablecoins, Afterpay emphasized that the Australian regime should piece of work with the crypto sector to consider what "framework an optimal environs for an AUD-backed stablecoin should look like."

According to Afterpay, the objective should exist to provide stablecoin users with protections concerning the asset but regulate information technology in a fashion that doesn't stifle fintech innovation in Australia.

"This includes considering if regulatory instruments are required for stablecoin issuers to take transparent and acceptable prudential reserve holdings, consumer-focused data protections and fair and appealable processes in identify regarding account blacklisting," it said.