Australia Digital Payment Market Overview, 2029

Australia's experience with digital payments dates back several decades, to the 1980s adoption of EFTPOS, or Electronic Funds Transfer at Point of Sale. This innovation transformed the way Australians performed transactions, setting the framework for future advances in payment technology. Throughout the 1990s, debit cards became widely accepted, followed by credit cards and online banking in the early 2000s. However, in recent years, there has been a considerable increase in the adoption of mobile wallets and other novel payment methods, indicating a shift in the country's financial landscape. In this dynamic environment, many events act as catalysts for innovation and collaboration in the digital payment sector. The FinTech Australia Summit stands out as an important industry gathering, allowing stakeholders to exchange ideas, exhibit innovations, and build collaborations. Similarly, Money20/20 acts as a global platform for the most recent trends and advancements in the payments business, attracting international attendees and encouraging cross-border collaboration. These events not only highlight Australia's digital payments expertise, but also provide chances for information sharing and networking among businesses and experts. According to the research report "Australia Digital Payment Market Overview, 2029," published by Bonafide Research, the Australia Digital Payment market is expected to grow with more than 21% CAGR from 2024 to 2029. Several factors are pushing Australia's journey to digital payments. Government measures are critical, with officials actively supporting cashless transactions to improve efficiency and cut costs across multiple sectors. Technological improvements, particularly those in mobile technology and security procedures, have increased trust and confidence in digital payment systems. Furthermore, the growing e-commerce industry has increased demand for secure and convenient online payment solutions, hastening the spread of digital payment systems across the country. Despite the increasing rise and use of digital payments, some problems remain. Data security concerns remain prominent, as customers emphasise privacy and security in their financial activities. Payment providers confront the constant issue of developing strong safeguards to protect sensitive personal and financial information. Furthermore, the increasingly competitive landscape poses hurdles to both existing businesses and rising fintech startups. The digital payments business is becoming increasingly competitive as new competitors introduce novel solutions on a regular basis. Furthermore, maintaining financial inclusion and accessibility for all demographic groups remains a key challenge, necessitating collaborative efforts to close the digital divide and give equal access to digital payment options across the population.

The provision of solutions and services in the realm of digital payments encompasses a comprehensive array of technologies and processes designed to facilitate electronic transactions, money transfers, and financial activities across digital channels such as the internet or mobile networks. These solutions are instrumental in creating an ecosystem that ensures secure, convenient, and efficient digital payments. Transactions can be categorised based on their type, with domestic payments referring to transactions conducted within a country's borders, while cross-border payments extend beyond national boundaries. Payment modes offer diverse options for users, including cards (plastic or virtual), ACH transfers, digital wallets (e-wallets or mobile wallets), and other methods like contactless payments, biometric payments, and bank transfers. These modes cater to various preferences and needs of users, ensuring flexibility and accessibility in conducting financial transactions. Moreover, digital payment solutions serve a wide range of industries and end-user verticals, including Banking, Financial Services, and Insurance (BFSI), healthcare, IT & telecom, media & entertainment, retail & ecommerce, transportation, and others. Each industry sector benefits from tailored digital payment services that streamline transactions and enhance operational efficiency. In essence, the digital payment landscape thrives on the diversity and adaptability of its solutions and services, catering to the evolving needs of users and industries alike in an increasingly digital world. In terms of recent industry advances, the implementation of Open Banking legislation in 2021 was a watershed moment, promoting increased competition and innovation by facilitating secure data sharing among financial institutions. This legal framework encourages the development of new payment solutions and services, giving consumers greater options and control over their financial information. Looking ahead, Australia's central bank's announcement in 2022 of plans for a digital currency (CBDC) has aroused debate about its possible impact on the digital payments system. The implementation of a CBDC could redefine the landscape by providing a government-backed digital alternative to traditional currency, potentially altering consumer behaviour and market dynamics. Furthermore, the traction obtained by various new entrants in 2023 highlights the continued evolution of the sector, as businesses continue to compete for market share by offering innovative and competitive digital payment solutions customised to increasing customer demands and preferences. Australia has built a solid regulatory framework for digital payments, overseen by both the Australian Securities and Investments Commission (ASIC) and the Reserve Bank of Australia (RBA). This framework stresses consumer protection, data security, and market competition. These policies create a stable environment for firms to operate in, fostering trust among consumers and stakeholders. Digital payment providers use a variety of marketing methods to attract and keep customers. One typical strategy is to launch digital marketing campaigns that use internet platforms to reach a larger audience and promote their services. Furthermore, collaborations with merchants and retailers are critical in providing special deals and incentives to encourage people to utilise their platforms. Loyalty programs are also important in increasing consumer engagement, rewarding customers for their ongoing usage, and driving repeat business. Implementing these promotional methods allows digital payment companies to effectively differentiate themselves in a competitive market and encourage consumer adoption. Compared to other established economies in the region, such as Singapore and South Korea, Australia has followed a similar path toward digital payments. However, certain regional counterparts may have a modest advantage in certain areas, such as mobile wallet uptake and the incorporation of emerging technologies like blockchain into payment systems. These countries have been quick to adopt financial technology advancements, resulting in more efficient and convenient payment ecosystems. While Australia may trail behind in certain specific sectors, it remains competitive and is making progress in improving its digital payment landscape.

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Prashant Tiwari

Research Analyst

Considered in this report • Historic year: 2018 • Base year: 2023 • Estimated year: 2024 • Forecast year: 2029 Aspects covered in this report • Digital Payment market Outlook with its value and forecast along with its segments • Various drivers and challenges • On-going trends and developments • Top profiled companies • Strategic recommendation By Offering • Solutions • Services

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By Transaction type • Domestic • Cross Border By Payment Type • Cards • ACH Transfer • Digital Wallet • Other Payment Modes By Vertical • BFSI • Healthcare • IT & Telecom • Media & Entertainment • Retail & E-commerce • Transportation • Others The approach of the report: This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources. Intended audience This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Digital Payment industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.