Payments company Worldpay has predicted Australians will greatly increase the use of alternative payments over that of credit cards in the next five years.
Credit cards are currently the dominant eCommerce payment method in Australia, accounting for 37% of all eCommerce in 2017. According to Worldpay, this figure is set to drop to 12.6% by 2021, with bank transfers replacing credit cards as the most popular payment method. Although accounting for less than a fifth of all online payments today, bank transfers are projected to jump by 23% over the next five years, to make up 43% of the market.
Debit cards are also in decline, set to fall from 9% to just 6.5% of the market, while cash on delivery will also drop slightly – from 7% to 5.6%. Meanwhile the use of e-Wallets, already a very popular payment method in Australia, is set increase by 4% over the same timeframe, making up 28% of online payments.
The findings come from Worldpay’s annual Global Payments Report, which analysed eCommerce spending patterns across 36 different markets on five continents. The research forecasts that the Asia-Pacific eCommerce market will grow by an average of 12% annually and is set to be worth USD2,100 billion by 2021. Projected to grow by 11% over this period, Australia’s eCommerce market is slower than average for the region, however mobile commerce is set to soar by an impressive 31% by 2021.
Worldpay General Manager for Asia Pacific Phil Pomford said: “Australia is a unique market within Asia-Pacific: it has a highly-connected, affluent and growing population, combined with very high level of international sales. Cross-border trade accounted for nearly 20% of Australian eCommerce in 2016 and a massive 86% of consumers said that they have completed a cross-border purchase.”
“As Australians start to use more alternative payments such as e-Wallets and bank transfers in addition to plastic, merchants and other retailers must ensure that they can continue to support Australian consumers’ preferred ways to pay,” continued Pomford. “They should also take into account the very strong growth in mobile commerce, and continue to invest in providing great mobile shopping experience by integrating popular payment methods into their mobile commerce platforms.”
This growing preference for alternative payments can be seen throughout all of Asia Pacific, including:
- In Hong Kong, where e-wallets are catching up to credit cards, and are set to make up more than a quarter of the online payments market (28%) by 2021.
- In Singapore, while credit cards are overwhelmingly the payment method of choice in 2017 (66% market share), by 2021 both bank transfers and e-wallets are set to nearly double in share; from 11% to 21% and 13% to 21%, respectively.
- In India, e-wallets (26%) and bank transfers (24%) are already the most popular payment methods, and by 2021 credit cards are expected to decline from 12% to 8% market share.