30
Payments Regulation in Asia
Australia
PAYMENTS MIX
Australia is one of the most developed payments markets globally, with over 70% of online spending taking place on a card or digital wallet (Figure 5), and over 80% of POS AUD spending taking place with a card or wallet (Figure 6). In terms of absolute figures, card transactions have experienced meteoric increases since the early 2000s, largely driven by growth of debit cards (Figures 7 and 8). From 2010-2020, the number of debit transactions exploded, growing at an average compound annual growth rate (CAGR) of 12%, more than double the credit CAGR over that period. As of 2023, debit cards represented the highest number and value of transactions, representing 75% of all card transactions. Debit cards grew significantly from 2013-2016, driven in particular by a 14-percentage point increase in their share of in-store payments below $20, becoming the most popular payment method for all but the lowest-value transactions (transactions valued at $10 or less). In this period, the use of debit card was especially popular among young Australians, with the ratio of debit to credit payments made by consumers under 30 doubling. 48 By 2019, the vast majority of Australians had a payment card, with 99% of consumers reporting owning at least one debit or credit card, and 50% of consumers reporting having both. Alongside the significant growth of in-store card payments between 2016-2019 was the rise of contactless payments which has facilitated growth of card market share for low-value transactions. By 2019, card payments represented the majority of transactions across all payment values, including transactions valued at $10 or less. 49 This growth followed a 5x increase in the use of contactless transactions, which grew to represent 50% of in-store credit and debit card transactions. 50 Since 2019, card payments have continued to grow despite significant decreases in 2020 as a result of the COVID-19 pandemic. In addition, particular to the COVID era and to Australia is the rise of Buy Now, Pay Later (BNPL) payments. Designed as an interest-free installment solution, BNPL offers consumers the option to split a transaction into equal installments to be paid over a period of time. BNPL exhibited huge growth in a very short period of time as consumers, particularly those under 40, were attracted to the interest-free installment solution: from 2018-2019, BNPL went from zero to eight percent of ecommerce spending. 51 By 2022, BNPL represented 14% of ecommerce spending – over one in eight dollars spent on a BNPL solution.
48
https://www.rba.gov.au/publications/rdp/2017/pdf/rdp2017-04.pdf
49
https://www.rba.gov.au/publications/rdp/2020/pdf/rdp2020-06.pdf
50
Ibid
51 https://www.businesswire.com/news/home/20240228622294/en/Australia-Buy-Now-Pay-Later-Re- port-2024-BNPL-Firms-are-Forging-Strategic-Alliances-to-Provide-Targeted-Offers-to-Shoppers-at-Check- out---ResearchAndMarkets.com#:~:text=The%20report%20from%20the%20Reserve,leading%20up%20 to%20November%202023.
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