The Australian credit and charge card payments market is set to grow by 4.9% in 2022, while the debit card payments market will grow by 11.3% as a result of improving economic conditions and rising consumer spending, according to GlobalData. The leading data and analytics company also notes that the market is expected to grow at a compound annual growth rate (CAGR) of 3.2% between 2022 to 2026, to reach AUD379.8 billion (US$276.1 billion) in 2026.

Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “As a result of the stringent lockdowns and travel restrictions Australia implemented during the COVID-19 pandemic, the country had fewer confirmed cases compared to other countries like the UK. However, the consequent drop in consumer spending had a large impact on the Australian card payments market.”

According to GlobalData’s Payment Cards Analytics database, the value of credit and charge card payments in Australia registered a decline of 10.7% in 2020. However, the economy’s gradual recovery in 2021 caused the credit and charge card payment market value to register a 7% growth.

Sharma adds: “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 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 have a positive effect on the credit and charge card payments market in the coming years. Furthermore, the government opening its borders to international travellers is also expected to positively contribute to consumer spending and support the growth of the card payments market.

Buy now pay later (BNPL) brands such as Afterpay, Openpay and Zip are challenging the card payments market as they are gradually positioning themselves as an alternative to traditional credit. These schemes are particularly popular among millennials, as they provide flexibility for consumers to pay for their purchases at later dates in interest-free instalments. In Australia, BNPL provider Afterpay saw its market share in total ecommerce value increase from 0.8% in 2017 to 7.7% in 2021. This was due to consumers looking for a cheaper alternative to credit cards.