Contactless payment cards in Australia are gaining momentum as banks, merchants, and consumers embrace faster ways to complete everyday transactions. With millions of contactless cards already in circulation and acceptance expanding at merchant locations, Australia is emerging as another significant market for the technology in the Asia-Pacific region. Growing familiarity with tap-and-go payments could also create a foundation for the next stage of payment innovation, including NFC-enabled mobile payments.
A recent news report from Australia suggests that more than four million people in the country are already using contactless payment cards. The Australian banking industry has been actively promoting this new payment format to consumers. All the major banks and many other financial institutions offer such cards to their customers. Right now the number of contactless cards stands at about 4.5 million and is expected to double within next year.
So far, it has appeared that many countries in the Asia-Pac region are early adopters of the new technology. In Japan, Korea, and Taiwan, millions and millions of contactless payment cards in different formats have been issued to the hands of consumers. One of the many explanations for this is that contactless payments are more attractive to consumers and merchants in markets with such high population densities that there is always pressure to speed up transactions and shorten wait time in front of the check-out counter. Australia is not one of the most populous countries in the region, but there might be a spill-over effect from other countries in the region that have warmed up to contactless.
Usage of contactless cards has been rising fast. Commonwealth Bank said it processed more than 150,000 contactless transactions in November, up almost 70% from a month earlier. On the acceptance side, things are also evolving quickly. Currently there are about 35,000 merchant locations accepting contactless payments and the number is expected to triple within a year.
Will the popularity of contactless cards pave the way for NFC-based mobile payment services in Australia? With tens of millions of mobile handsets equipped with NFC expected to be in the hands of consumers around the world by the end of next year, that is an intriguing question for the banking and mobile industry in Australia. Let’s wait and see.
The rapid expansion of contactless payment cards in Australia demonstrates how quickly consumer payment behavior can change when both issuers and merchants support a new technology. With approximately 4.5 million contactless cards already available and that figure expected to double within the next year, consumers are gaining more opportunities to become comfortable with tap-and-go transactions.
Merchant acceptance is equally important to the technology’s growth. The roughly 35,000 locations currently accepting contactless payments give cardholders practical reasons to use the feature, while the anticipated tripling of that number should make contactless transactions increasingly commonplace.
Experience in other Asia-Pacific markets also suggests that speed and convenience can be powerful incentives for adoption. Although Australia does not face the same population-density pressures as markets such as Japan, Korea, and Taiwan, consumers and merchants can still benefit from shorter transaction times and reduced checkout friction.
The next question is whether familiarity with contactless cards will translate into demand for NFC-based mobile payments. As more NFC-equipped phones reach consumers, banks and mobile providers will have an opportunity to build upon the payment behavior established by contactless cards.
For now, the growth of contactless payment cards in Australia provides a strong indication that consumers are receptive to faster payment experiences. If card issuance and merchant acceptance continue expanding as expected, contactless technology could provide an important bridge between traditional payment cards and emerging mobile payment services.
