Australia's payday lending market has grown up as a bit of a cottage industry but that is going to change dramatically over the next few years, according to one of the industry's leaders.The chief executive of Paid International, Tim Dean, said regulatory change introduced this year would force the industry to become highly efficient. Dean said: "The industry will consolidate. Only a small number of very efficient operations will find the new rules workable."Our business is all online. We are handling 30,000 applications a month with no physical touch-points."Small-amount lenders now operate under interest rate caps. For finance contracts worth up to $2000 that run for less than two years, there is a limit of 20 per cent on any upfront charge and a limit of four per cent on monthly charges.Lenders will not be allowed to refinance small-amount contracts. The aim is to stop debt rolling over and compounding.For larger loans, a credit provider is prohibited from entering into a contract where the annual "cost rate" exceeds 48 per cent.The introduction of interest rate caps is the second piece of major regulation directed at the payday lending industry this year. Providers of small-amount credit contracts must review clients' bank statements for the previous 90 days to verify their income. Loans with terms of less than 16 days are prohibited, unless it is an authorised deposit-taking institution offering a continuing credit contract.A loan will be presumed to be unsuitable if the applicant is in default under another small-amount credit contract or has been a debtor under two or more small-amount credit contracts within the previous 90 days.If a borrower receives 50 per cent or more of their gross income from Centrelink, no more than 20 per cent of their income can be allocated to loan repayments.Dean said: "These changes are necessary to give clarity to the market. High-interest lenders need to operate in a controlled environment."On Monday, Paid International changed its name from First Stop Money. Dean said the new name was part of a re-positioning of the business.The company was launched in Perth, in 2009. It moved into New Zealand last year, and has a call centre in Manila.Dean said that over the next few months Paid International would launch a suite of new products aimed at "middle Australia". "Our customers are not Centrelink clients," he said.