Australian e-commerce transactions are set to grow strongly over the next 5 years. FIS’s 2022 Global Payments Report by Worldpay shows broad growth across multiple segments in e-commerce, with digital wallets producing an especially strong projection. As Kenn Anthony Mendoza reports in IT Wire:
“Credit/charge cards remains the leading online payment method among Australians in 2021, accounting for a third (33%) of e-commerce transaction values, however, a FIS report forecasts that digital wallets will overtake to credit/charge cards to become the leading e-commerce payment method in Australia by 2025.”
Other key highlights include growth of overall e-commerce transactions and Buy Now, Pay Later options for Australian consumers::
The FIS report also highlights the following e-commerce payment trends:
• Australia’s e-commerce market is set to grow by more than half (51%) between 2021 and 2025 to US$70.7 billion in transaction value.
• In 2021, the leading online payment method was credit/charge cards which accounting 33% of transaction value, followed by digital wallets (26%), debit cards (15%) and BNPL (11%).
• Digital wallets are projected to overtake credit/charge cards to become the leading e-commerce payment method by 2024.
• BNPL is the fastest growing online payment method and projected to account for 14% of e-commerce transaction value by 2025 – trailing only New Zealand in APAC where BNPL is expected to claim 17% of online transaction value.
Outside of e-commerce activities, the report also shows a recovery in point-of-sale (POS) transactions but a sharp decline in cash purchases. For point-of-sale payment trends the FIS report found:
• POS transaction value rebounded strongly in 2021, with Australia seeing one of the largest relative expansions in APAC at 22%.
• Cash is in steep decline, and Australia is expected to have the lowest cash share in APAC in 2025 with cash accounting only 2% of POS transaction value.
Australians are not alone in abandoning cash. Mercator’s North American PaymentsInsights data indicates a reduction in cash for both U.S. and Canadian consumers as digital payment options for both on-site and online sales grow.
Overview by Jordan Hirschfield, Director of Research at Mercator Advisory Group