Mobile Wallets Surpass Cash as Preferred Payment Method in Australia

June 27, 2024 TruthUSA

The Australian Banking Association reported a massive increase in mobile wallet transactions from 2019 to 2023, reaching $126 billion.

Recent research has revealed that digital payments through mobile wallets have surpassed cash transactions in Australia.

On June 27, the Australian Banking Association (ABA) released a comprehensive report (pdf) highlighting banking trends among Australian consumers.

The ABA found that mobile wallet transactions surged by 18 times to $126 billion between 2019 and 2023, exceeding the total cash withdrawn from ATMs ($106 billion).

Cash payments have significantly declined since 2007, with nearly a 10 percent decrease each year in retail payments made with cash.

In 2022, cash transactions constituted less than 20 percent of retail payments, with the total value of cash payments dropping to only 7.5 percent.

The decline in cash usage was evident across all income levels and age groups, irrespective of location.

“Segments with traditionally high cash usage have experienced a substantial decline,” the report noted.

The age group of 65 and above saw the most significant shift, with a 69 percent reduction in cash transactions since 2007.

Additionally, the drop in cash transactions in regional and remote areas (80 percent) outpaced that in major cities, resulting in minimal differences between these areas currently.

There was also a notable decrease in cash payments for small amounts.

In 2007, almost all payments ranging from $1 to $10 were made in cash, but by 2022, this figure had dropped to slightly over 20 percent.

Alongside payments, consumers have increasingly turned to online platforms to engage with banks.

The ABA reported that 99.1 percent of interactions now occur online or through apps.

In contrast, interactions at bank branches decreased by 47 percent between 2019 and 2023.

ABA CEO Anna Bligh described Australia’s current state as a “digital banking boom.”

“Thanks to the convenience of digital banking, Australians are engaging with their banks more than ever before,” she remarked.

“They now have the flexibility to bank whenever and wherever they prefer.”

ABA’s Commitment to Cash Services

Despite the rapid growth of digital banking, Ms. Bligh assured consumers that banks remain committed to supporting cash transactions and in-person banking services.

“While cash usage is declining, Australia is not on the verge of becoming entirely cashless,” she emphasized.

“Banks still maintain a robust branch network, with Australia boasting a branch density higher than the OECD average, in addition to face-to-face services available at over 3,500 Bank@Post locations nationwide.”

As of 2022, Australia had 19 bank branches per 100,000 adults.

Despite the ABA’s stance, commercial banks in Australia continue closing branches, prompting concerns among consumers.

Data from the Australian Prudential Regulation Authority indicated that 424 bank branches and 718 ATMs were shut down in the 2023 financial year alone.

Since July 2017, the number of bank branches across Australia has decreased by 37 percent.

In a related development, the Banking Code Compliance Committee (BCCC) publicly reprimanded Westpac Bank for “serious and systemic breaches” of the Banking Code of Practice following the closure of its Tennant Creek branch in the Northern Territory.

The BCCC found that Westpac Bank failed to offer adequate customer support after the branch closure, leaving around 3,400 local residents without access to certain banking services.

Source link