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Australians Choose Online Payment Methods Like Buy-Now-Pay-Later, As Cash Use Dips

Australians Choose Online Payment Methods Like Buy-Now-Pay-Later, As Cash Use Dips
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  • Australians Choose Online Payment Methods Like Buy-Now-Pay-Later, As Cash Use Dips
Post Series: eCommerce Explorer: People and Payments

Australian online purchases soared by more than 85 percent in August, compared to the same time last year1

Australia Post, which is hiring more than 4000 extra staff to keep up with demand, delivered to eight million households between March and August 2020.2 The pandemic has accelerated Australia’s well-established love for online shopping. In fact, Australians spend more than five hours a week shopping online, spending an average of almost $10,000 each year on online shopping — contributing $167 billion to the nation’s economy.3

Behind Australia’s eCommerce Boom

Australia has a growing youth population and is a nation of avid social media users. Australians spend a third of their online time on social media, with advertising reach growing across many platforms.4 Given Australians’ savviness with ecommerce and social media, merchants and marketplaces need to provide mobile apps with a great user experience, and well-optimized cart and checkout experiences.

Apps Are Key for Australian eCommerce Success

Pie Chart: in-app purchases far exceed mobile web purchases in Australia

Why debit and credit card payments remain popular in Australia

When it comes to online payment processing in Australia, merchants must give shoppers the card payment methods they know and expect. There’s a reason why card payments make up more than half of ecommerce payments in the country. Card penetration is high, at an average of 2.58 cards per consumer5 and card usage is well-established thanks to some of the most widespread credit card POS device coverage in the world.6

Visa and Mastercard payment options are table stakes for Australian online shoppers, with digital wallets Visa Checkout and Masterpass increasingly available.

Popular Payment Methods in Australia

Bar Graph: Most Popular Payment Methods in Australia

Unsurprisingly, cash use is dwindling. Software comparison company Capterra discovered the pandemic was driving Australians away from cash7 and towards alternative methods:

  • 58% of Australians have a mobile wallet installed on their devices.
  • 97% of respondents plan to use mobile wallets post COVID-19.
  • A fifth will still ‘always’ carry cash, regardless of digital payment alternatives.

Cross-Border Shopping Is Second Nature for Australians

Australians are comfortable buying goods from overseas, with international purchases strongly outranking domestic sales, to the frustration of long-established Australian national retailers such as David Jones and Myer. China is a significant source of consumer goods, as are the United States and Japan. Australians’ familiarity with cross-border online shopping is an opportunity for international retailers who get their local sales, marketing and payment strategies right. But to do so, it’s important to offer payment options and transparent pricing in Australian dollars, along with credit and debit cards, and increasingly popular BNPL options, such as Afterpay, Latitude, or Zip.

How Do You Accept Local Payments in Australia?

Discover Rapyd’s all-in-one Australia payment services.

 

 

Sources:

  1. https://auspost.com.au/content/dam/auspost_corp/media/documents/inside-australian-online-shopping-update-sep2020.pdf
  2. https://newsroom.auspost.com.au/article/australia-post-announces-4000-jobs-in-record-hiring-blitz
  3. https://www.finder.com.au/finder-covid-19-online-shopping-report
  4. https://wearesocial.com/au/digital-2020-australia
  5. https://www.jpmorgan.com/merchant-services/insights/reports/australia
  6. https://www.auspaynet.com.au/sites/default/files/2019-08/AustralianPaymentCardFraud2019_0.pdf
  7. https://prwire.com.au/print/55-of-australians-say-theyre-ready-to-become-a-cashless-society
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