Australia Cards And Payments Market Size (2024-2030)

The Australia Cards And Payments Market was valued at USD 11.54 billion in 2023. Over the forecast period of 2024-2030, it is projected to reach USD 33.49 billion by 2030, growing at a CAGR of 16.44%.

Australians display a notable preference for electronic payment methods, with a widespread embrace of debit, credit, and charge cards. The payments industry has undergone considerable transformation, marked by the rise of contactless payments, an increase in the use of debit cards, and the advent of digital wallets. This shift has been accompanied by a decrease in cash transactions, particularly for smaller purchases, while contactless payment solutions are being incorporated into public transport systems. Fintech companies are emerging as significant players alongside traditional card issuers in the payment card industry, driven by the expanding e-commerce sector. Additionally, international businesses are entering the Australian market to leverage e-commerce growth, introducing innovative shopping experiences such as livestream shopping.

Key Market Insights:

In Australia's cards and payments sector, primary instruments include cards, cash, credit transfers, direct debits, and cheques. As of 2023, cards lead in transaction volumes, experiencing significant growth due to continued investment in payment infrastructure, rising adoption of contactless payments, and regulatory changes regarding interchange fees. The growing presence of digital-only banks is anticipated to further boost card usage and drive expansion in the Australian credit card market.

Australia Cards And Payments Market Drivers:

E-Commerce Segment drives market growth.

According to Australia Post, the home and garden e-commerce sector experienced a 37% year-over-year growth in July 2021 compared to January of the previous year. Similarly, the food and beverage sector, along with hobbies and recreation, saw increases exceeding 30%.

National Australia Bank reported that online retail spending by domestic merchants in the department stores category surged by 51.1% in August 2022 compared to the previous year, while international merchants in this category grew at a rate of 33.3%.

Regulation is becoming increasingly significant in shaping digital commerce within the region. As open banking gains traction in Australia, the country has evolved into a real-time cross-border payment hub. In mid-2023, the Federal Government proposed reforms to financial market infrastructure (FMI), which were endorsed by the Reserve Bank of Australia's Payment Systems Board. These initiatives aim to enhance the accessibility of real-time cross-border transactions through various disruptive technologies and services.

Omnichannel commerce refers to selling through multiple channels—such as e-commerce websites, Amazon, eBay, and Instagram—to ensure a seamless experience and consistent brand messaging across all touchpoints. This approach focuses on meeting customers where they are and facilitating easy purchases. Mobile devices are particularly well-suited for omnichannel commerce, as most customers carry their smartphones with them at all times.

Australia Cards And Payments Market Restraints and Challenges: Increase in interest rate hinder market growth

Credit and charge cards are less widely adopted compared to debit cards, and the rising interest rates on credit cards pose a significant challenge to their use. Major banks, including Westpac, ANZ, National Australia Bank (NAB), and CommBank, are progressively raising their interest rates. For example, starting June 20, 2024, Westpac increased the APR on its Rewards and Low Fee credit cards by up to 1.25 percentage points, bringing it to 20.99%. Additionally, the cash advance rates on all credit cards will rise by 0.5 percentage points to 21.99%. This trend indicates that credit is becoming more costly in the country.

Australia Cards And Payments Market Opportunities:

Purchasing Online creates opportunities for market growth.

According to a recent survey conducted by Marqeta, Australian consumers are leading the way in mobile wallet adoption and digital banking tool usage, surpassing their counterparts in the United States and the United Kingdom in abandoning cash and physical payment methods. The 2022 State of Consumer Money Movement study by Marqeta surveyed 4,076 individuals across three continents, including over 1,000 in Australia, to explore payment, banking, and shopping preferences in the United States, the United Kingdom, and Australia.

The survey reveals that 69% of Australians feel secure enough using a mobile wallet to leave their physical wallet at home, which is 23% higher than the proportion of Americans with the same sentiment. Mobile wallets were rated highly for convenience, with 90% of Australians giving them favorable reviews, and 86% of Australians reported they could use mobile payments wherever they desired.

Contevo reports that over half of Australians now have at least one Buy Now Pay Later (BNPL) account, leading many retailers to offer a range of BNPL options to cater to diverse customer needs. It is also essential for retailers to provide PayPal and credit card payment options that accommodate the currencies preferred by their customers. Changing consumer shopping behaviors, including a rise in online orders, have necessitated rapid scaling and adaptation by Australian Post and other delivery services. Late-night and weekend deliveries are expected to become standard for most of 2020, as increased lead times can negatively impact customer satisfaction and drive consumers to seek better service elsewhere.

The shift in consumer preferences and the varied approaches of businesses to capture market share present opportunities for growth in online sales. For example, the rise of Click & Collect orders indicates that more consumers are opting to pre-purchase items and spend less time in physical stores. Offering a seamless Click & Collect experience will be crucial in driving the growth of companies in this evolving market.

AUSTRALIA CARDS AND PAYMENTS MARKET REPORT COVERAGE:

Australia Cards And Payments Market Segmentation:

Australia Cards And Payments Market Segmentation By Cards:

• Debit Cards
• Credit Cards
• Prepaid Cards

In the Australian cards and payments industry, debit cards represent the majority of payment methods used. Australians' comfort with using both debit and credit cards has contributed significantly to this trend.

Credit cards have become central to Australia's payment landscape, with approximately 16 million cards in circulation and around 40% of adults holding at least one. The market features a wide range of providers and products designed to meet diverse consumer needs. While credit and debit cards together account for a significant portion of non-cash transactions, electronic funds transfers are typically preferred for high-value transactions.

Australia Cards And Payments Market Segmentation By Payment Terminals:

• POS
• ATMs

The introduction of a national QR payment system, enabled by the New Payment Platform and featuring a pay-by-account option at the point of sale, offers promising opportunities for ambitious newcomers. However, achieving a foothold in a market traditionally dominated by the Big Four banks will require a well-informed strategy and strategic partnerships.

Australia Cards And Payments Market Segmentation By Payment Instruments:

• Credit Transfers
• Direct Debit
• Cheques
• Cash
• Payment Cards

Payment cards have been the leading payment instrument in the Australian cards and payments market. The sector's growth has been driven by ongoing investments in payment infrastructure from both the government and financial institutions, increased adoption of contactless payments, and decreasing interchange fees. These factors have expanded consumer payment options, especially for low-value transactions, and have contributed to a decrease in cash usage.

  COVID-19 Pandemic: Impact Analysis

The COVID-19 pandemic has accelerated the long-term shift towards cards and other electronic payment methods. Consumers increasingly preferred using their cards or mobile phones for payments rather than inserting cards into payment terminals. According to the Bank's 2019 Consumer Payments Survey, conducted before the pandemic, contactless tap-and-go payments accounted for approximately 55% of in-person transactions by number, reflecting significant growth in previous years. Although most contactless payments were made with plastic cards, the adoption of mobile wallets was also on the rise. Industry data and anecdotal evidence suggest that the pandemic has further accelerated the transition to tap-and-go payments, particularly through cards stored in mobile wallets on smartphones or other devices such as smartwatches.

Latest Trends/ Developments:

May 2022 - National Australia Bank (NAB) has introduced a new buy now, pay later (BNPL) service, allowing customers to pre-register for enhanced financial flexibility. Customers can borrow up to USD 1,000, divide their purchases into four payments, and use the service wherever Visa is accepted. NAB Now Pay Later can be integrated into digital wallets and used for in-person transactions.

April 2022 - P97 Networks, a mobile commerce platform, has partnered with Viva Energy Australia to create a fleet management and driver app. The Shell Card Go app will enable fleet managers and drivers to make contactless mobile payments for fuel at Shell, Liberty, and Coles Express locations. The app also includes features for locating stations, viewing site details, earning rewards, and accessing transaction histories.

April 2022 - ANZ Worldline Payment Solutions, a collaboration between ANZ and global payments company Worldline provide Australian merchants with access to some of the most advanced payment solutions available globally, customized to meet the specific needs of the Australian market.