The total transaction value in Australia has been revised down to a compound annual growth rate (CAGR) of 2.4% between 2019-23 as consumer spending is forecast to decline due to the coronavirus (Covid-19) pandemic, according to GlobalData, a leading data and analytics company.

GlobalData’s Covid-19 Sector Impact: Payments Snapshot – Australia report forecasts the value of cash transactions to decline by a CAGR of 4.3% between 2019-23f.

Ravi Sharma Senior Banking and Payments Analyst at GlobalData, comments: “The Australian economy has had a torrid year, with the Covid-19 pandemic happening as the country was recovering from widespread bushfires. Furthermore, China, the epicenter of the Covid-19 outbreak, and one of the worst affected countries, is Australia’s largest inbound market. It represents nearly a third of its total international visitor spend (as of December 2019).”

The steep decline in consumer spending will impact the payment industry. GlobalData’s 2019 Banking and Payments Survey found that travel, accommodation, food and drink accounted for nearly 43.3% of total credit card transaction value.

In a trend seen around the world, contactless payments will increase sharply, as cash transactions fall. The use of NFC-enabled mobile wallet solutions, such as Apple Pay, Google Pay and Samsung Pay should also increase as consumers look for safer payment measures.

Sharma concludes: “Australia is one of the most highly-developed contactless card markets in the world. GlobalData’s 2019 Banking and Payments survey found that 56.3% of Australian consumers have a contactless card and use it for payments.”