The Australian Payments Network (AusPayNet) has released its most recent Digital Economy report which found that Australia’s shift to a digital economy is accelerating. Digital payments are rapidly increasing while cash and cheques decline.
The study conducted by the payments industry self-regulatory body says that over 8.3 billion card payments were made in Australia in 2017, with almost 70 percent being made with a debit card. Debit card payments grew 15.3% to 5.6 billion in 2017, up 87% since 2012.
The use of cheques is in a downward spiral as cheques written declined by 19.7% to 89.7 million. ATM withdrawals are too losing its place as Australians are gradually avoiding paying in cash. Withdrawals dropped by 5.9% to 610.1 million in 2017.
Leila Fourie, Chief Executive Officer of AusPayNet, commented:
“The continued shift to digital payments is not surprising given how connected and mobile our society is. Almost 9 in every 10 Australians own a smartphone, and more than 3 in every 5 use them to make payments. This is driving uptake in digital payments and laying down a powerful base for the next wave of payments innovation.”
Mobile apps, who provide a more seamless payment experience, are key drivers of this change in behavior. Additionally, the report says that the New Payments Platform (NPP) is also playing a role as it allows customers to make easier and faster payments using a mobile phone number or an email address rather than BSB and account number.
E-commerce in Australia has grown once again, with online purchasers growing from 61% of the population to 72% in 2016-17. The value of online spending has also increased significantly, up by 15.1% in 2016-17. Australia’s migration to digital payments is enabled by a high penetration of point-of-sale terminals and a low number of ATMs relative to many overseas countries, according to the report.
The Australian Payments Network suggests a number of government initiatives to support the transition to the digital economy. These include open-loop transit (metro transport cards that are account-based and compatible across networks in different cities), open banking and the consumer data rights.
Roubini Thoughtlab, led by renowned economist Nouriel Roubini, has recently conducted a study which found that cashlessness boosts GDP. The report said that relying more on electronic payments, such as cards and mobile payments, could yield a net benefit of up to $470 billion per year across 100 cities around the world, roughly the equivalent to 3% of the average GDP for these cities.