Debit and credit cards remain the preferred payment method for Australians’ online purchases, collectively accounting for just over half of e-commerce payments last year, according to a new survey.
Card payments captured a 50.6 per cent share of e-commerce payments, according to GlobalData’s 2023 Financial Services Consumer Survey, which undertook a global survey of consumer payment habits.
Credit and charge cards alone accounted for a 29.2 per cent share of e-commerce payments in Australia, with GlobalData identifying benefits such as reward points, cashback, discounts at partner merchants, and the availability of installment payment facilities as key drivers for these card-based payments.
Alternative payment solutions, including online payments facilitators like PayPal, Google Pay and Apple Pay, collectively accounted for just over one-third (34.2 per cent) of payments last year. PayPal remains the preferred alternative payment option, followed by other brands including Apple Pay and buy now, pay later (BNPL) service Afterpay.
Bank transfers represent a little over one in 10 e-commerce payments, with cash representing around one in 20.
Australia’s e-commerce market is expected to reach AU$109.7 billion by 2028, with an anticipated compound annual growth rate of 7.6 per cent between 2024 and 2028. Last year, the local e-commerce market grew by 10.3 per cent last year to reach AU$74.9 billion, with an expected increase of 9.3 per cent this year to reach AU$81.9 billion.
Kartik Challa, senior banking and payments analyst at GlobalData, noted that “the rapid adoption of smartphones, growing internet penetration, the availability of secure online payment systems, and the increasing number of online shoppers all supported this growth.”
He added that online payments will be further encouraged over the next few years by “evolving authentication measures that offer enhanced security and faster checkout options”.
The presence of secure payment solutions, including Mastercard Identity Check, and faster checkout options such as Click to Pay and PayPal Express Checkout, have encouraged more consumers to shop online, GlobalData added.
According to survey figures, around 84 per cent of Australian consumers reported having shopped online in the past six months; only six per cent of respondents stated that they never shopped online.
In 2022, online sales accounted for just under one in five retail sales in Australia.
