Australia's Shift to Electronic Payments

Ellis Connolly, Head of Payments Policy at Reserve Bank of Australia, delivered a speech at the AFR Banking Summit [28 March 2023] that shone a light on Australia's remarkable shift to electronic payments. Here are some key take-outs from that speech.

The payments landscape in Australia is rapidly evolving. It is becoming increasingly digital as consumers become ever more comfortable paying for goods and services electronically, particularly using cards.

Cards are now the main way Australians pay


  • The RBA's Consumer Payments Survey [2022] revealed that only 13 per cent of transactions were made using cash — a share of transactions that has halved over the past three years.

  • Consumers are making three-quarters of their payments using the card networks – half with debit cards and a quarter with credit cards.

  • Australians make card payments more frequently than in many comparable economies like South Korea, the US, the UK and Canada.

  • With accelerated growth of e-commerce through the pandemic, Australian consumers are making around 15 per cent of their card payments online.


Card dominance raises some important issues


The dominance of cards and the consumer shift to mobile devices raise some important issues within the RBA’s mandate, specifically...

  • Lowering card payment costs for merchants: The trend towards card payments is putting upward pressure on merchant payment costs. This has been most evident in debit card use. 
"In the past, customers inserted their debit card into a terminal at the point of sale and selected ‘cheque/savings’ for it to be routed through the eftpos network or ‘credit’ for it to be routed via the international networks (Mastercard or Visa). It turns out that most people selected ‘cheque/savings’. The shift to tapping cards and mobile devices, however, has resulted in most debit card transactions being routed to Mastercard and Visa and away from eftpos. With the international networks on average costing around 20 basis points more to accept for in-person transactions, this has resulted in an increase in merchant costs for accepting debit card payments."

Ellis Connolly - Head of Payments Policy | Reserve Bank of Australia

  • Enhancing the safety and resilience of retail payment systems: A key focus of the RBA will be on the safety and resilience of the New Payments Platform (NPP), Australia’s fast payments system.
"The NPP processes payments 24/7 in real time and Australians expect the system to be available when they need to use it. This is particularly important given industry discussions on potentially retiring the Bulk Electronic Clearing System (BECS), which currently processes most account transfers, including direct debits and payroll."

Ellis Connolly

  • Supporting the development of alternative payment methods like the NPP: Cards might currently be the dominant electronic payment method in Australia, but when we look to other countries in our region, we see alternative models of payment that are less reliant on cards.
"We could see a similar wave of retail payments innovation unleashed in Australia through the NPP and its PayTo service. This service provides a convenient and secure way for consumers to authorise merchants to initiate a payment from their account via the NPP."

Ellis Connolly

The speech also delved into least-cost routing [LCR] and challenges around its uptake and availability; and improving the transparency of scheme fees payable by both acquirers and issuers to the card networks.

After listening to Mr Connolly's speech, Zepto CEO Chris Jewell noted, "Our mission is aligned to that of the RBA. We are laser-focused on delivering value for businesses and their customers by pioneering a more competitive, efficient and secure payments ecosystem."

"Zepto’s trusted, world-class technology opens up for businesses a unique set of access points to Australia’s payments infrastructure. We were the first non-bank fintech to directly connect to Australia’s real-time payments infrastructure as a Connected Institution which allows us to initiate PayTo transactions without a bank intermediary. And we were also the first non-bank payments provider to be authorised by the ACCC as an ADR in the CDR. We are changing the way value moves through the economy and redefining the future of business payments."

Chris Jewell

Are you making the shift to electronic payments?

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