Last editedDec 20222 min read
The most popular payment methods in Australia are changing as technology evolves. The country’s booming ecommerce market caters to tech-savvy customers embracing mobile payments, buy now pay later, and other digital methods. If you want your business to grow, you’ll need to keep pace with these advances. Here are four payment trends in Australia to watch and implement into your payment strategy.
1. Real-time digital payments are growing.
Bank-to-bank payments have historically been slower than other methods, but this is all changing with real-time payment services like Osko and PayTo. Driven by Australia’s New Payments Platform, services like PayTo let businesses take payments directly from customer bank accounts in real time.
Another benefit is the use of customer data to improve the digital payment experience. For example, invoices, receipts, and bank statements can be automatically attached to digital payments. These services are also linking up across the world to facilitate more efficient cross-border transactions.
With PayTo, customers can link bank accounts to apps, subscription services, loan repayments, digital wallets, and more. It’s secure as well, providing real-time customer account validation and verification of funds to prevent fraud. GoCardless is teaming with PayTo for a faster, more secure alternative to direct debit. Customers can take instant payments, optimising infrastructure for security and cost at the same time.
2. Cryptocurrency is going mainstream.
The crypto market has ebbed and flowed in recent years, but it looks to be on the rise again with the Australian government’s new plans for Digital Currency Exchanges. The government will establish a licencing framework to regulate the cryptocurrency market, providing stronger safeguards for consumers. This could help move cryptocurrency from an alternative payment method into a more mainstream option. Australia payment statistics show consistent year-on-year growth, with 28.8% of Australians owning some form of cryptocurrency in 2021, up from just 18.4% in 2020.
The government is also debating the feasibility of issuing a central bank digital currency, or CBDC. This would keep the country up to date alongside other major countries like China, which is expected to launch its own CBDC soon.
3. BNPL continues to attract ecommerce shoppers.
Buy now pay later services like Afterpay and Zip have become ubiquitous in the ecommerce environment. These allow customers to spread the cost of a purchase over a series of interest-free payments, taken directly from the customer’s bank account. Nielsen research shows that 91% of Australians were aware of BNPL in 2020 alone, and it has grown to become one of the most popular payment methods in Australia. Consumer spending using BNPL has doubled over the past three years, growing from $5.6 billion to $11.9 billion.
Apple has announced it’s planning to enter the BNPL market in the United States with the launch of its Apple Pay Later service, and it is eyeing up the Australian market as well. The Australian government is looking at ways to manage the competition and regulate this swiftly growing market.
4. Mobile payments are on the rise.
According to a report from JP Morgan, the mobile commerce market is valued at $8.3 billion with smartphone penetration at 68%. The same report estimates that mobile payments are expected to rise rapidly to reach a value of $16.6 billion. Australia’s online shoppers use their mobile devices to complete one quarter of ecommerce transactions. There’s no sign that this trend will slow down anytime soon, as consumers use their phones not only to access ecommerce websites but also to shop via social media posts. The JP Morgan research shows that 85% of shoppers made a purchase after viewing the item on social media first.
For Australian merchants, it’s best to offer an omnichannel shopping experience that includes social media and mobile apps. Make sure your site is optimised for all devices to prevent abandoned shopping carts and give conversion rate a boost.
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