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Australia Country Report

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  • Published Date: April 2020

A comprehensive overview of the cards, payments, consumer banking and merchant acquirer market in Australia.

What you will learn from this Australia payments research report:

  • Why companion cards have left the Australian market.
  • How interchange has drawn regulatory action.
  • Which players are benefiting from Australia's contactless uplift.
  • How tech innovations are impacting the market.
  • What Open Banking means for issuers in Australia.

AUSTRALIA CARD PAYMENTS REPORT | KEY FACTS

  • Australia's retail banking and payments landscape is dominated by a quartet of domestic banks: ANZ, CBA, NAB and Westpac.
  • To increase competition, the authorities have initiated Open Banking and an instant payments platform: the NPP.
  • The consumer lending industry is subject to ongoing scrutiny in the form of official inquiries and probes by the competition commission.
  • The credit cards market has plateaued in recent years, with interchange regulation, competition from other forms of lending and a fall-off in consumer demand all contributing factors.
  • Debit card spending has grown rapidly over the last decade: the convenience of contactless has been the key driver in the shift away from cash.
  • The growth of contactless has eroded the share of Eftpos, the domestic debit scheme, with Visa and Mastercard sharing the fruits of their first-mover advantage.
  • With contactless now available on Eftpos, regulators have been warning acquirers to allow merchants to choose how transactions are routed on dual-network cards. Mandated routing may emerge as a result.
  • Buy now, pay later (BNPL) services that offer interest-free instalment payments have grown rapidly, particularly amongst the young.
  • Australia is one of the few advanced economies where issuing banks still control the acquiring market. However, there has been an increase in competition from startups and global acquirers.

Australia Payments Research | Report Contents

Key Topics
Demographics and the economy
Payments environment
Cards market
Mobile payments
Profit pool
The card networks
Key retail banks and issuers
Acquiring and processing
Online acquiring
Regulatory and other cards market information
Appendices: Data

Appendix I: Demographics and the economy

Demographic and economic indicators
Ownership of key consumer devices
Internet usage by population

Appendix II: Payments environment

Access points
Account penetration
Consumer payment trends
B2C e-commerce payment methods

Appendix III: Cards market

Total cards payment metrics
Contactless cards metrics
Credit card numbers
Total credit card data metrics
Credit cards profitability indicators
Debit cards numbers
Debit cards metrics
Prepaid/e-money cards metrics

Appendix IV: Mobile payments

Mobile proximity payment metrics
Mobile P2P payments

Appendix V: Profit pool

Profit pool

Appendix VI: The card networks

Networks' credit card market shares
Networks' credit card data numbers
Networks' credit card billed volume
Networks' number of credit card transactions
Networks' average credit card transaction value
Credit card interchange fees by network
Networks' debit card market shares
Networks' debit card numbers
Networks' debit card billed volume
Networks' number of debit card transactions
Networks' average debit card transaction value
Debit card interchange fees by network

Appendix VII: Key retail banks and issuers

Key credit card issuers market shares by credit card numbers
Key issuers market shares in credit card outstandings
Key debit card issuers market shares by debit card numbers

Appendix VIII: Acquirers and processing

Merchant acquirer credit card market share
Credit card merchant service charges
Merchant acquirer debit card market share
Debit card merchant service charges
Credit card issuer, issuing processor relationships
Credit card acquirer, acquiring processor relationships
Credit card issuing processor market shares by card numbers
Credit card acquiring processor market shares by the number of POS transactions

Appendix IX: Online acquiring

  • Online merchant acquirer market share

Australia Country Report | Selected Extracts

Demographics and Economy:
Australia's proximity to and strong trade and investment ties with Asia have fuelled the economy. For example, Chinese visitors numbered 1.43 million in 2018, spending about $8 billion.

Payments Environment:
While card use in Australia has long been among the highest globally, alternative digital payment methods are gaining prominence. The country's instant payment scheme went live in 2018 and Open Banking is being rolled out.

Cards market:
There were about 74 million cards in issue in Australia at the end of 2019, of which 20 million were credit cards, 43 million were debit cards and the remaining 10 million were prepaid cards.

Mobile Payments:
Australians' attitude towards payments has been changing rapidly during the last decade. The use of cash as a mode of payment continues to decline as consumers increasingly shift to electronic payment methods, especially for smaller transactions; the country is slowly becoming a cashless society.

Profit Pool:
Australia's credit cards market is highly profitable, with high levels of spend per card, relatively high borrowing levels and a low default rate by international standards. According to VFR's profit pool model, profits have remained stable at around $2.2 billion per year.

Card Networks:
Australia has a competitive credit cards market, with four of the major international brands – Visa, Mastercard, American Express and Diners Club – having a presence. Most major banks in the market issue just one of Visa- or Mastercard-branded credit cards.

Key Retail Banks and Issuers:
The retail banking market in Australia is dominated by the 'Big Four': Commonwealth Bank (CBA), Westpac, Australia and New Zealand Bank (ANZ) and National Australia Bank (NAB). Combined, they control about 69 per cent of credit cards in issue. Prominent foreign banks include HSBC and Citibank.

Acquiring and Processing:
With an estimated combined share of 67% in credit cards acquired billed volume and 74% in credit card transactions in 2019, the merchant acquiring market in Australia is dominated by NAB, Commonwealth Bank, Westpac and ANZ Bank. However, this hegemony has slowly reduced over the years.

Online Acquiring:
Total consumer e-commerce spend in Australia is estimated to have been $45 billion in 2019, with about three-quarters of the population shopping online. E-commerce transactions are characterised by a trend for seeking bargains online.

Regulatory and Markets Information:
In a move to make Australia a cashless society, the Reserve Bank of Australia (RBA), in association with financial institutions including ANZ Bank, Westpac and Commonwealth Bank, launched the New Payment Platform (NPP).

Australia Payments Trends | Entities Referenced

ABN Amro
ACCC
Adyen
Afterpay
Alipay
American Express
ANZ
Apple Pay
ASIC
Australia and New Zealand Banking Group
Australia Post
Australian Bureau of Statistics
Australian Competition and Consumer Commission
Australian Securities and Investments Commission
Bambora
Bank of Queensland
Bankwest
Barclays
BBVA
Bendigo and Adelaide Bank
BNPL
BodyBoss
BOQ
BPAY Group
Buy now pay later
CBA
CDR
Certegy
Cirrus
Citi Australia
Citibank
Citigroup
Coco & Eve
Coles
CommBank
Commonwealth Bank
Consumer data right
Covid-19
Cuscal
CyberSource
David Jones
Diners Club
EDS
Eftpos
Eftpos Payments Australia
EMVCo
ePAL
eWAY
Ezidebit
FirstData
Fiserv
Fitbit Pay
G+D
Garmin Pay
Global Payments
Google Pay
HSBC
HSBC
IBM
Illawarra Mutual Building Society
IMB
ING
Internationale Nederlanden Groep
Klarna
Kogan
Lonely Planet
Mastercard
MobileSecurity
NAB
National Australia Bank
New Payments Platform
NPP
Open Banking
Oxipay
PayPal
PayPal Credit Australia
Qantas
Queenslanders Credit Union
Rambus
RBA
Reserve Bank of Australia
Samsung Pay
Sand & Sky
SecureCo
Skiddoo
SkinnyMint
Société Générale
Square
St George Bank
Suncorp
Supernova
Tyro
UnionPay
VGW
Virgin Australia
Visa
Webjet
WeChat Pay
Westpac
Wirecard
Woolworths
Worldpay
zipMoney
zipPay

MORE ASIA-PACIFIC CARDS & PAYMENTS REPORTS

Verisk reports delivering market and competitor intelligence on payments cards, e-money, acquiring/processing, retail banking, and consumer credit in the Asia Pacific region. Researchers use primary and secondary source data and conduct in-depth interviews with senior industry executives and Asia Pacific finance experts.

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