In Australia, tap and go is king.
Driven by a population seeking more flexible ways to pay, Australia has seen a surge in contactless payments.
Card payments overtook cash in 2016, and have been rising ever since. Greater convenience, confidence in stronger digital security, and a retail sector willing to embrace technological change have seen Australia become the largest user of contactless payments in the world.
Australia’s rapid contactless growth
A decade ago, there were roughly 200 million monthly card transactions in Australia. As of March this year, that number has grown to almost 800 million a month.
With such a staggering increase in the use of cards, it’s no surprise that contactless payments have enjoyed such a significant rise in use amongst Australians. Consumers are embracing digital payment technologies, with around four in five using tap and go payments every week.
The Reserve Bank of Australia (RBA) reported in 2019, that 83% of point-of-sale card transactions were contactless. This signifies a rise of almost 20% in three years.
So how many transactions is that?
Card payments in Australia grew from 6.6 billion in 2015 to 10.5 billion in 2019. And according to GlobalData, this number should reach a whopping 14.9 billion in 2023.
Consider that the number of contactless cards in Australia will increase from 59.6 million in 2019 to 68.9 million by 2023, and you’ve got yourself the most developed contactless payment country on earth.
Embracing change at point-of-sale
From the corner store to the top end of town, Aussie retailers have quickly adopted new payment technologies. It’s rare to see any point-of-sale terminal that doesn’t accept contactless cards or mobile contactless methods anymore.
Why is this?
Consumers have pointed towards added convenience and quicker processing times for this shift towards tap and go. With no PIN required (unless spending over $100), face-to-face transactions are cleaner, quicker, and an overall much more pleasant experience.
Another factor — security — has always been a large concern for consumers.
Contactless fraud rates are at an all-time low, with online fraud providing the bulk of card-based crime. This makes carrying a tap and go card or digital wallet the safest choice for carrying money around.
Include the growth of the population with the 18-36 age bracket, and the pictures become even clearer.
This age group now makes up 26% of the Australian population. Shoppers in this group generally opt for efficient financial tools like contactless cards and digital wallets. With smaller merchants like cafés, pubs, pharmacies, and grocery stores embracing this digital change, it’s a win-win for both retailers and consumers.
Digital wallets stay slow and steady
Contactless payments on mobile devices, smartwatches and fitness bands have also begun to make some (slow) inroads into the Australian tap and go market. Apple Pay, Google Pay, and Samsung Pay are the frontrunners of this technology and are the most widely accepted digital wallets at point-of-sale terminals in Australia.
Roy Morgan Digital Payments reported a sharp increase in the use of mobile contactless payment services compared to a year ago.
Use of non-bank contactless/cardless mobile payments*
*2018-2020 data from Roy Morgan.
10.8% of Australians now use mobile payment services such as Apple Pay and Google Pay, up from 7.1% a year ago. Apple Pay is now used by 6.5% and Google Pay is now used by 4.1%. Samsung Pay hovers around 1%.
The growth in contactless mobile device payments has increased among consumers aged under 40. The RBA reported that almost one in five people in this age group recorded at least one contactless mobile payment during the week of their 2019 Consumer Payments Survey.
Going from strength to strength
It’s clear that Aussies want to get their shopping done quickly and painlessly. With a retail sector that moves in harmony with the consumer, contactless payments have helped Australia become the seventh most cashless country on the planet. And for a country that prides itself on keeping it simple, tap and go is very much the way of the future for this card crazed nation.