GlobalData’s Payment Cards Analytics reveals that credit and charge card payments by value in Australia registered a strong growth of 17.0% in 2022. This was driven by the economic rebound and rise in consumer spending post Covid-19 pandemic. The value is expected to grow further by 9.1% to reach A$407.1bn ($277.4bn) in 2023.
The economic uncertainty caused by the pandemic forced consumers to cut down on unnecessary spending, which resulted in the decline of credit and charge card payments value by 10.7% in 2020. However, with the revival of economic activities, the credit and charge card payments value increased by 7.0% in 2021 and 17% in 2022.
Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “Australians are frequent users of credit and charge cards, with the average frequency of card payments per person at 130.3 in 2022, up from 118.0 during pre-pandemic period in 2019.
“The country’s strong payment infrastructure, high consumer preference for card payments, and merchant acceptance have supported this growth. The Covid-19 pandemic resulted in further shift in consumer preferences towards non-cash methods of payment, which benefited credit and charge cards”.
Rising e-commerce payments
Rising e-commerce payments is also contributing to the growth in credit and charge card usage in Australia. According to GlobalData’s 2022 Financial Services Consumer Survey*, credit and charge cards are one of the most preferred payment tools for online payments with 14.9% share in 2022.
While the credit and charge card market is on a growth trajectory, it is facing threat from the growing popularity of buy now pay later (BNPL) solutions such as Afterpay and Zip. In a bid to counter the mounting threat from BNPL providers, payment card companies have also started offering pay later services. For instance, Visa offers its Visa Instalments service in the country, allowing credit card holders to pay for purchases in instalments. All major banks are now offering similar services in Australia.
Sharma concludes: “The economic recovery, rise in consumer spending and growth in e-commerce payments will continue to push credit and charge card payments usage in Australia. The market is projected to register a compound annual growth rate (CAGR) of 6.0% between 2023 to 2027, to reach A$514.8bn ($350.7bn) in 2027.”
GlobalData’s 2022 Financial Services Consumer Survey was carried out in Q2 2022. Approximately 50,000 respondents aged 18+ were surveyed across 40 countries.