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The Australian credit and debit cards market remains strong, with issuers successfully maximising revenue, according to Argus Advisory Research's latest report on the country's consumer payments sector .
There is no doubt that cards have been facing significant headwinds, with outstandings and purchase volume both falling significantly during 2020: fortunately, pandemic effects should peter out, although longer-term pressure has been coming to bear through the ongoing effects of interchange caps, which have narrowed the range of rewards-centred products.
To add to a dynamic mix, payments innovations have become a constant in this market, with cash usage markedly declining amid a transformed payments infrastructure, upgraded most particularly by the introduction of the New Payment Platform (NPP). This year, the NPP is set to make a new national QR payment system possible, which will introduce the PayTo pay-by-account option as a means to more choice at the point of sale. In addition, Australia is seen as the world's BNPL leader, with transactions projected to grow by almost half this year according to Argus Advisory Research.
However, the growing usage of contactless (over 80 percent of all card purchase transactions here in 2021, excluding prepaid) has served to boost card usage, especially of the debit variety. Verisk Financial Research projects that card purchase volume will rise by more than six percent this year, with the number of transactions set to increase by almost nine percent.
Mobile P2P boomed during the first year of the pandemic thanks to the NPP-based Osko service, while mobile proximity payments too saw a banner year. Least-cost routing requirements for debit cards, introduced by the central bank, means that the domestic scheme's market share has been able to begin rebuilding its share of purchase volume.
Those seeking to identify opportunities in Australian cards and payments need the unmatchable acumen and data provided by AAR. "This market is concentrated in the hands of four main banks", noted Patrick Houlihan, senior research analyst at Argus Advisory Research, "which is probably why Citi has left – it is hard to gain market share when the incumbents are so strong. A new entrant would be advised to look into some kind of partnership with one of the main banks (such as Worldline has in acquiring, entering a new joint venture with ANZ), or else to acquire one of the smaller players which already has a footprint, but a serious investment would be needed to gain significant market share."
The new report on Australia's cards and payments landscape is one of many individual country reports, each with unique profit pool metrics and analysis. Leveraging data reaching back to 2010 – and forecasts up to 2024 – this extensive data set features over 250 metrics for each market. Featuring appendices that set out the market positions of the leading BNPL lenders, this publication comes with 47 detailed data tables as well as informative and carefully compiled charts.
Each AAR market report takes a consistent approach, with clear-sighted commentary and in-depth data providing comparable insight across markets. The Australia country report is available for subscribers to download now, or to order online.
About Argus Advisory Research The market-leading online, interactive database and data dashboards covering the global cards and payments industry in detail, plus a range of data-packed country and regional reports. Leveraging financial cards data going back to 2010 – and forecasts up to 2022 – our unique datasets cover countries around the world and feature more than 250 metrics per market.