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More than 100 Australian fintech companies made their debuts in 2020. What are the key facts to know about fintech investing in Australia?

Australia is one of the most dynamic areas for fintech, with over 800 fintech companies currently scattered around the nation's states and territories.

Fintech, or financial technology, is set to be the future of the financial services industry, and in Australia the market had an estimated worth of AU$4 billion in 2020, up from AU$250 million five years earlier. As a global fintech leader, many of the country's top players have expanded beyond its borders or plan to do so.

What else should investors know about the burgeoning Australian fintech space? Read on for a look at what this tech arena looks like right now and what could be next.


Fintech investing in Australia: Understanding the market

2020 was a bumper year for fintech in Australia, with more than 100 Australian fintech companies making their debuts, according to KPMG's latest Fintech Landscape report.

It's clear that fintech is booming as Australians look for new ways to combine finance and technology. As Finder reported this past October, around 3.7 million Australians now use digital wallets — that's close to 20 percent of the nation. What's more, 30 percent have connected their debit or credit cards to their smartphones or watches.

The COVID-19 pandemic has played a role in Australia's fintech growth over the last year or so. As fear of coronavirus transmission took hold, the country saw a huge drop in the use of cash, with Australians using fintech solutions to pay for their items and services.

The rise of open banking has also been a boon for the industry. Under open banking, which formally commenced in mid-2020, customers can securely share banking data with other accredited banks and fintech companies, allowing for greater financial agency.

Fintech investing in Australia: Top stocks by market cap

Australia's fintech market is on the move, and for investors looking to jump into the space it may make sense to start with the biggest players before going on the hunt for smaller-cap stocks with future potential.

Here's a brief look at the biggest ASX-listed fintech stocks by market cap. Data was current as of May 3, 2021.

1. Afterpay (ASX:APT)

Market cap: AU$32.99 billion

A behemoth in the ASX tech space, Afterpay dominates the buy now, pay later (BNPL) industry, allowing users to buy diverse items using payment plans, but still receive their purchases right away.

After a mammoth year in ecommerce after the initial coronavirus shutdowns and extended lockdowns, the BNPL phenomenon is unlikely to fade anytime soon, and Afterpay continues to lead the pack.

2. Xero (ASX:XRO)

Market cap: AU$20.7 billion

This cloud-based accounting software platform services small- and medium-sized businesses. Xero bills itself as the most sophisticated software provider for accountants, and operates under a cloud-first environment.

Investors hope Xero will emerge stronger and more profitable from the COVID-19 crisis, experiencing growth as small businesses bounce back.

3. Iress (ASX:IRE)

Market cap: AU$1.92 billion

Iress is a tech company that specialises in software for the financial services industry, with more than 500,000 users globally. With over 9,000 business clients, it has offices in diverse locations worldwide.

4. Pushpay Holdings (ASX:PPH)

Market cap: AU$1.83 billion

Pushpay Holdings has created a donor and church management system. It provides donor tools, finance tools and a custom community app for the faith sector in the US, Canada, Australia and New Zealand. It also caters to non-profit organisations and education providers.

5. Bravura Solutions (ASX:BVS)

Market cap: AU$680.24 million

Software company Bravura Solutions develops tech solutions for leading financial institutions. After being admitted to the S&P ASX 200 Index (INDEXASX:XJO) in 2018, it has been acquiring similar companies, including Fino Comp and Midwinter. The business offers recurring revenue, a strong balance sheet and scalability.

Fintech investing in Australia: Market outlook

Aside from those major players, it's worth looking at a few Australian fintech stocks that had notable share price gains in 2020. For example, Money3 (ASX:MNY) saw a 23.31 percent gain; meanwhile, next-gen neobank Douugh (ASX:DOU) rose more than 100 percent from the time it launched in October until the end of last year.

So what's next for this exciting industry? In a recent report, EY states that Australia's fintech market is “among the world's most important fintech ecosystems," and notes that despite COVID-19 challenges, the industry has been able to sustain its revenue base with more paying customers and global expansion plans.

Challenges moving forward include regulatory concerns and competitive pressure, with EY noting that policy enhancements, fewer barriers to open banking and continued engagement with regulators will be key if the sector is to continue advancing in the land down under.

If market participants can rise to meet those obstacles, those interested in the Australian fintech market can rest assured of finding future opportunities.

Don't forget to follow @INN_Australia for real-time updates!

Securities Disclosure: I, Ronelle Richards, hold no direct investment interest in any company mentioned in this article.

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Australia took a stand against Facebook and Google earlier this year, and the move could have long-term implications for tech investors.

It was a ban that sent Australians wild and had the whole world watching.

Back in February, Facebook (NASDAQ:FB) stopped users in Australia from posting news in a week-long blackout, reacting to proposed legislation that would have forced the social media behemoth to pay publishers for content.

What prompted Facebook to "friend" Australia again, and what are the potential long-term implications of the squabble? Read on to learn what tech-focused investors in Australia should know about the situation.


Australia squares off against Facebook

On February 25 of this year, Australia's federal government passed the News Media and Digital Platforms Mandatory Bargaining Code. It was developed after extensive analysis by the Australian Competition and Consumer Commission, and is aimed at ensuring that news media businesses are fairly remunerated for their content.

It stipulates that digital platforms such as Facebook and Google (both named in the documentation) must pay news outlets whose content they feature — for example, if content is shared on Facebook or shows up in Google search results. The idea is that this will help to sustain journalism in Australia.

Unsurprisingly, Facebook and Google didn't react well to the code, which was first introduced in 2020.

Google didn't make any moves after it passed, but Facebook quickly made it impossible for Australian users to share news content, and pages for both local and international news organisations went blank — a major concern given the COVID-19 and wildfire concerns that were circulating at the time.

Australian Prime Minister Scott Morrison was scathing about Facebook's decision — which he ironically shared in a Facebook post — declaring the tech giant's actions "as arrogant as they were disappointing." He added, "These actions will only confirm the concerns that an increasing number of countries are expressing about the behaviour of BigTech companies who think they are bigger than governments and that the rules should not apply to them."

Despite strong feelings from both Australia and Facebook, the dispute was resolved fairly quickly, with the country agreeing to make four amendments to the legislation and Facebook restoring Australian's access to news.

Implications for Big Tech and news organisations

Both Australia and Facebook have claimed victory in the dispute, with a Facebook representative saying the company will be able to decide if news appears on the platform — meaning it won't automatically have to negotiate with any news businesses. Changes were also made to the arbitration process.

Tech experts have pointed out that larger news companies may ultimately benefit from the changes, but smaller ones could be pushed to the side. Major publishers that have struck agreements with tech giants, such as News Corp, Nine Entertainment (ASX:NEC,OTC Pink:NNMTF), Seven West Media (ASX:SWM) and Guardian Australia, may be able to increase their market share while smaller independent players lose out.

A business that is in full support of the laws is Microsoft (NASDAQ:MSFT). During the conflict, President Brad Smith came out loudly in favour of Australia's law, and advised that his company is willing to step up with search engine Bing should Google and/or Facebook pull out of the Australian market.

"In Australia, Prime Minister Scott Morrison has pushed forward with legislation two years in the making to redress the competitive imbalance between the tech sector and an independent press. The ideas are straightforward. Dominant tech properties like Facebook and Google will need to invest in transparency, including by explaining how they display news content," he said in a blog post.

"The United States should not object to a creative Australian proposal that strengthens democracy by requiring tech companies to support a free press. It should copy it instead."

Global reach and tech investor impact

Six months down the road from Australia's landmark legislation, it's tough to say what the long-term impact may be.

That said, market watchers do believe the country is part of a new precedent of forcing Big Tech into paying for journalism — something giants Facebook and Google are not used to.

Countries looking to pursue similar legislation include Canada, where Facebook agreed in May to pay 14 publishers to link to their articles on its COVID-19 and climate science pages, as well as other unspecified use cases. Canada is pursuing other avenues too. Meanwhile, in France, Google said it will pay publishers for news content after the country took up new EU copyright laws that make digital platforms liable for infringements.

For investors, the takeaway is perhaps that while companies like Facebook and Google may seem too big too fail, they too can fall subject to new regulations that can change how they do business. As nations around the world look to take back control from these mega companies, it's important to be aware of possible effects on their bottom lines.

Don't forget to follow @INN_Australia for real-time updates!

Securities Disclosure: I, Ronelle Richards, hold no direct investment interest in any company mentioned in this article.

Queensland is the 16th most attractive jurisdiction in the world, sneaking in above BC and the Yukon in Canada, and just behind New Mexico in the US.

Queensland is one of the top three Australian jurisdictions for copper.

While it's well behind South Australia, a behemoth in the country for resources and production, Queensland hosts some 12 percent of all known Australian copper deposits, level with its southern neighbour New South Wales.

A premier mining jurisdiction globally, Queensland is ranked third out of all Australian jurisdictions for mining investment attractiveness, according to the Fraser Institute. Globally, it's ranked as the 16th most attractive jurisdiction, sneaking in above BC and the Yukon in Canada, and just behind New Mexico in the US.


The state is renowned for its mining prowess in Australia, and is known as one of the resource states, with a large chunk of its economic heft coming from the mining industry and its operations across the vast state.

Overall, mining accounts for 11.7 percent of Queensland's economy, with coal and liquefied natural gas being the primary focus of output. Together, coal, gas and mineral exports account for over 80 percent of Queensland's exports, according to the state government.

Having said that, copper plays a large role, and Queensland is home to the second biggest producer of copper in Australia in the form of Glencore's (LSE:GLEN,OTC Pink:GLCNF) Mount Isa mining complex in the northwest of the state. There, Glencore owns and operates the Enterprise and X41 mines.

Aside from Mount Isa, Glencore owns the nearby Ernest Henry copper mine. Combined, Glencore's Queensland operations produced 138,800 tonnes of copper in 2020 — accounting for a little over 10 percent of the company's global copper production. Glencore isn't listed on the ASX, but can be found on the LSE.

Besides the Mount Isa complex itself, there's also a handful of other operational mines in the northwestern portion of the state, although most of them are privately owned, such as the Capricorn copper project, which is a joint venture between EMR Capital and Lighthouse Minerals; it secured itself "prescribed project" status in 2017.

Other privately owned projects include Round Oak's Barbara project (in care and maintenance), Chinese-backed CuDECO's Rockland copper project (mothballed, CuDECO in liquidation) and Chinova's Osborne mine — which was originally set up by Ivanhoe Mines (TSX:IVN,OTCQX:IVPAF). There's also the Balcooma mine, which Royal Gold (NASDAQ:RGLD) has copper royalties on, and the privately owned Mount Cuthbert mine.

Many of the mentioned projects ran into trouble in 2020, with the COVID-19 pandemic limiting company operations.

All in all, Queensland has 13 operational copper mines, but as can be seen many are in private hands, making investment opportunities somewhat slim. Aside from previously mentioned Glencore operations, there's Red River Resources (ASX:RVR,OTC Pink:RRRDF), which owns the Thalanga operations near Charters Towers. Red River acquired Thalanga in 2014, and has been working to develop the legacy site back into a viable investment.

From the beginning of production in 2017, the operations have a lifespan of some 10 years, according to Red River, with further development and exploration options on the table. In its most recent quarterly report, Thalanga reported output of 3,086 tonnes of copper concentrate.

The remainder of the options on the table for investors are exploration focused, such as Copper Mountain Mining (ASX:C6C,OTC Pink:CPPMF) with interests in the Eva copper project, which is — unsurprisingly — in the northwest of the state, near the town of Cloncurry. Eva is in the development phase, with a feasibility study completed in early 2020 envisaging a 15 year mine life with an annual expected output of 106 million pounds of copper equivalent.

There's also Global Energy Metals (TSXV:GEMC,OTCQB:GBLEF), which like Glencore isn't on the ASX, but has interests in the Millenium cobalt-copper-gold project and others near Mount Isa — all in the exploration stage.

Aside from that, Strategic Energy Resources (ASX:SER) acquired exploration licences from Newcrest Mining (ASX:NCM,OTC Pink:NCMGF) in May 2021 for licences around Mount Isa, and Zenith Minerals (ASX:ZNC) is exploring the Develin Creek copper-zinc project. Zenith recently divested from another copper project, Flannagans, in June 2021 by selling its interests to a private company for $450,000.

Don't forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Scott Tibballs, currently hold no direct investment interest in any company mentioned in this article.

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