The Australian credit and charge card payments market is forecast to grow by 4.9 per cent this year, with surging demand for non-cash payment options post-Covid lockdowns, according to the latest industry data.
The debit card payments market is also expected to swell by 11.3 per cent as a result of improving economic conditions and increased consumer spending this year, Global Data has revealed in its latest credit and debit industry report.
The data analytics and consulting firm predicts that the credit and charge card market will also grow at a compound annual growth rate (CAGR) of 3.2 per cent between 2022 to 2026, reaching a record AU$379.8 billion in 2026.
While credit and charge card payments in Australia faced a precipitous 10.7 per cent drop in 2020 during the height of the Covid pandemic, a swift bounce back saw credit and charge card payment market value register seven per cent growth the following year.
Ravi Sharma, lead banking and payments analyst at GlobalData, attributed the sudden drop in 2020 to Australia’s stringent lockdowns and travel restrictions, with the “consequent drop in consumer spending [having] a large impact on the Australian card payments market.”
The subsequence rapid bounce back was also likely due to the substantially lower rates of confirmed Covid cases, particularly when compared to Europe, the UK and the US.
Sharma added: “Australians are prolific users of credit and charge cards, with the average frequency of card payments per card standing at 175.2 in 2021, up from 148.4 pre-pandemic (2019). This figure is one of the highest among its Asia-Pacific peers such as South Korea, China, Hong Kong, and Singapore.
“The country’s strong payment infrastructure, high consumer preference and merchant acceptance have supported this growth.
“Due to the restrictions that were implemented, the credit and charge card market growth plummeted during the pandemic in sectors like travel and accommodation. As these restrictions eased, a rebound in credit and charge card payments was seen.”
While GlobalData notes that the pandemic led to a decline in the overall consumer spending, it resulted in a significant shift in consumer preferences towards the use of non-cash methods of payment, which is expected to continue to have a positive effect on the credit and charge card payments market in the coming years.
Furthermore, the opening of Australia’s borders to international travellers is also expected to positively contribute to consumer spending and support the growth of the card payments market.