Australia Payments Market Size and Share Outlook: Forecast Trends and Growth Analysis Report (2024-2032)

Australia Payments Market Trends

Buy Now, Pay Later services have recently gained popularity in the market. It is driven by consumer demand to have greater control over purchase decisions while not necessarily requiring them to have the necessary funds upfront, thus shaping up trends in the Australia payments market. Consumers find these companies more appealing as they split the purchase into manageable and easier instalments, like Afterpay and Zip. BNPL is particularly attractive to the younger demographics, changing retail transactions and encouraging higher spendings, and also challenging traditional financial institutions to venture into similar offerings in order not to be outdone.

Australia Payments Market Growth

A key driver of the Australian payments market is the rapid increase in digital and mobile payment adoption. According to the Australian Payments Network, digital wallet usage surged by over 25% in 2021, with more than 15 million Australians utilising services like Apple Pay and Google Pay. This shift is fueled by consumer preferences for convenience and security in transactions, augmenting the Australia payments demand growth. Additionally, e-commerce sales rose by 57% during the pandemic, further accelerating the demand for efficient and innovative payment solutions across various sectors.

Australia Payments Market Insights

• In 2022, the New Payments Platform (NPP) Australia launched PayTo, a digital solution that allowed merchants and businesses to initiate real-time payments from their customers' bank accounts.
• On average, in 2023, non-cash payments worth approximately AUD 300 billion occurred each business day equivalent to about 11% of annual GDP, thus boosting the Australia payments demand.
• ATMs are the most common sources through which consumers withdraw cash with 72% of all cash withdrawals and 66% of the value withdrawn in 2023.

Industry News

October 2023

The Australian government announced plans to introduce laws empowering the central bank to regulate digital wallet providers, including Apple Pay and Google Pay, on Wednesday.

April 2022

ANZ Worldline Payment Solutions announced its launch in Australia as a joint venture between ANZ and global payments services leader Worldline. Australian merchants gained access to some of the world’s most advanced payment solutions, which were proven internationally and adapted to meet the unique requirements of the Australian market.

Australia Payments Market Drivers

E-commerce growth drives demand for seamless payment solutions, exemplified by Shopify's integrated offerings.

One of the major drivers for the growth of themarket is the boost in e-commerce, thus exponentially increasing demand for easy payment solutions. For example, in 2022, online retail sales accounted for more than AUD 60 billion in Australia that further highlights how people tend to rely more on their digital transactions, thus enhancing the growth in Australia payments market. Companies like Shopify tend to capitalise on this situation by providing integrated payment services that can make checkout a smooth and hassle-free process for online merchants. Shopify is helping businesses understand the new landscape through offerings of payment processing, inventory management, and customer engagement tools that will propel more growth in the digital payments sector.

Opportunities in the Australia Payments Market

Embedded finance solutions offer opportunities for integrated payments, enhancing customer experiences and conversion rates.

A huge opportunity in the Australian payments market is in the development of embedded finance solutions. It creates opportunities for companies to establish personalised financial services that complement customers' experiences, providing businesses with a niche to thrive in the Australia payments market. For example, enabling payments processing within a web shop helps merchants achieve transaction simplification and optimization of conversion rates. Such innovations could also be birthed by the collaboration of fintechs and legacy banks on digital wallets or instant credit solutions. This trend fulfils consumer demand but also generates new revenue opportunities for companies in the Australian payments market across all sectors.

Market Dynamics

Artificial intelligence (AI) for fraud detection and prevention is a new technology gaining traction in the Australian payments market. AI algorithms analyse transaction patterns in real time, identifying unusual behaviour that may indicate fraudulent activity, thus shaping the Australia payments market dynamics and trends. For instance, companies like Mastercard have implemented AI-driven tools that enhance security by flagging suspicious transactions before they are processed. This technology not only helps protect consumers and businesses from financial loss but also builds trust in digital payment systems. As cyber threats evolve, AI will play an increasingly critical role in securing the payments landscape.

Market Restraints

A significant challenge in the Australian payments market is the increasing threat of cyberattacks and fraud. As digital payment solutions expand, so do vulnerabilities, making it essential for companies to invest heavily in security measures. According to a 2022 report, incidents of payment fraud rose by over 30% compared to the previous year, becoming significant Australia payments market challenges. This rising risk can erode consumer trust and hinder the adoption of innovative payment technologies. Companies must continually enhance their cybersecurity protocols to safeguard sensitive financial information and maintain customer confidence.

Australia Payments Industry Segmentation

The EMR’s report titled “Australia Payments Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Mode of Payments

• Online Sale
• Point of Sale

Market Breakup by End Use

• Retail
• Hospitality
• Healthcare
• Entertainment
• Others

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• Western Australia
• Others

Australia Payments Market Share

By Mode of Payments

Online sales and POS payments are growing due to convenience, technology, and changing consumer preferences.

Both online sales and point of sale (POS) payments are gaining traction in Australia due to shifting consumer preferences and technological advancements. As per Australia payments market analysis, online sales have surged, especially during the pandemic, with e-commerce platforms providing convenient shopping experiences. The integration of digital wallets and BNPL services has further fueled this growth. Meanwhile, POS payments are evolving with the adoption of contactless technology and mobile payment solutions, allowing consumers to transact quickly and securely in-store. Together, these modes are transforming the payment landscape, enhancing flexibility and convenience for consumers and merchants alike.

Market Analysis by End Use

Retail, hospitality, healthcare, and entertainment sectors drive payment demand through convenience and innovative solutions.

Each end use in the Australian payments market contributes to increased demand in unique ways. In retail, the shift to e-commerce and contactless payments enhances convenience for consumers. The hospitality sector leverages digital payments to streamline transactions, improve customer experiences, and reduce wait times. In healthcare, electronic payment solutions enable efficient billing processes and patient convenience, fostering adoption. As per Australia payments industry analysis, the entertainment industry embraces digital ticketing and subscription services, driving demand for seamless transactions. Additionally, "Others" includes sectors like education and transportation, where innovative payment solutions facilitate transactions and enhance user experiences, collectively boosting overall market demand.

Australia Payments Market Regional Insights

New South Wales Payments Market Regional Insights

New South Wales (NSW) is a crucial hub in the Australian payments market, driven by its large population and economic activity. Sydney, as the financial centre, sees high adoption of digital payment solutions, including mobile wallets and contactless payments, thus boosting the payments market share in Australia. The state is also witnessing significant growth in e-commerce, with online retail sales increasing steadily. Regulatory support and initiatives aimed at enhancing payment security further bolster market growth. As consumers increasingly prioritise convenience, NSW is positioned to lead innovations in the payments landscape.

Victoria Payments Market Analysis

Victoria plays a vital role in the Australian payments market, with Melbourne as a key financial hub. The state has seen a surge in digital payment adoption, particularly in e-commerce and mobile wallets. For instance, companies like Afterpay, headquartered in Melbourne, have popularised Buy Now, Pay Later services, transforming consumer purchasing behaviour. Regulatory initiatives supporting payment security and innovation also contribute to market growth. As businesses increasingly embrace digital solutions, Victoria is poised for further advancements in payment technologies and consumer convenience.

Queensland Payments Market Trends

Contactless payments and digital wallets are gaining traction in the payments market in Queensland. With consumers finding convenience the new norm in preference, businesses are catching up by embracing these technological innovations, making transactions speedy and safe. For instance, checkouts are more convenient because retailers like Woolworths have incorporated the use of contactless payments. There is also another trend which is gaining, that of Buy Now, Pay Later services, while companies such as Zip dominate this industry. These trends indicate that Queensland is heading towards more innovative payments solutions that are much easier to use, given the rise in consumer preference.

Australian Capital Territory Payments Market Drivers

The Australian Capital Territory (ACT) payments market is driven by several key factors. The region’s high-tech landscape fosters innovation in digital payment solutions, with a growing emphasis on security and user experience. Government initiatives promoting cashless transactions further encourage adoption of digital wallets and contactless payments. Additionally, the strong presence of e-commerce in Canberra is pushing retailers to implement seamless payment systems. Consumer preferences for convenience and flexibility, coupled with regulatory support for fintech advancements, are propelling growth in the ACT’s payments market.

Western Australia Payments Market Dynamics

Western Australia (WA) is witnessing dynamic changes in its payments market, largely driven by technological advancements and changing consumer preferences. The rise of mobile payments and digital wallets has gained traction, particularly in urban areas like Perth. Local businesses are increasingly adopting these solutions to enhance customer convenience. Additionally, the booming mining and resource sectors are pushing demand for efficient payment systems that support both B2B and consumer transactions. Regulatory initiatives aimed at fostering innovation further contribute to the evolving payments landscape in WA.

Competitive Landscape

Australia payments market players strive to ensure innovative and convenient customer experience. They try to make transactions simpler with the use of contactless payments and digital wallets while providing security and fraud prevention among users. Moreover, real-time payment solutions by the Australia payments companies have considerable priority for cross-border transactions to make payments become smooth and easy as possible both for consumers and businesses.

Key Industry Players

Amazon Commercial Services Pty Limited

Founded in 2000, Amazon Commercial Services is headquartered in Sydney. The company offers a range of business payment options that involve the Amazon Pay product, whereby customers can make online payments using their Amazon accounts for services they want to receive. This smoothens checkout experiences, and this results in higher sales and more loyalty for merchants in Australia.

Mastercard International Incorporated

Based in Sydney, Mastercard was founded in 1966. Mastercard offers credit, debit, and prepaid cards. They are one of the pioneers in digital payment innovations, fraud prevention, and contactless transactions that not only cater to consumers but also businesses, all of which enhance the overall Australian experience of payment.

PayPal Australia Pty Limited

PayPal Australia was established in 2004, and it is headquartered in Sydney. The company offers online payment services to consumers and businesses so that they can send and receive money securely. It accepts various types of payments, including credit cards and bank transfers, making e-commerce transactions seamless and contributing to financial inclusion.

Airwallex Pty Ltd

Headquartered in Melbourne and launched in 2015, Airwallex provides cross-border payment solutions for businesses. The platform enables competitive foreign exchange rates, international money transfers, and virtual accounts, making it easier for firms to execute international transactions smoothly. The vision is for companies to experience an internationally seamless payments experience.

Other Australia Payments market key players are Web Active Corporation Pty Ltd, Worldline Australia Pty Ltd, Southern Payment Systems Pty Ltd, Square AU Pty Ltd, Visa Inc., and Zai Australia Pty Ltd, among others.

Recent Developments

September 2024

NAB has improved cross-border payments by linking international transfers to Australia’s real-time payment service, allowing faster processing and access to funds without traditional delays from global financial institutions.

April 2024

Global real-time payments platform Volt today unveiled the launch of its safe, PayTo-based one-click payment solution for the company's retail customers across Australia. The next generation of online digital payments would enable retailers to instantly get paid while streamlining a customer's payments experience with no credit card surcharge.