cards – APCA Blog

How Australians Make and Take Payments

Andy White — Wed, 20 Sep 2017 06:16:49 +0000

The RBA recently published its 2016 Consumer Payments Survey. Key findings were that survey participants made 37% of their payments with cash (compared to 69% in 2007) and 52% of their payments with a card (compared to 26% in 2007). This…

Payments Industry Policy and Government Round-up

Merric Foley — Thu, 22 Jun 2017 05:14:51 +0000

In recent months, the Commonwealth Government has announced a number of initiatives that touch on the world of payments. We are pleased to be working in a collaborative capacity with the government on the topics outlined below. If you would…

Milestones Report, May 2017: Cheque use plunges in the digital economy

Payments Direction — Thu, 08 Jun 2017 22:58:09 +0000

Our latest Milestones Report looks at the payment choices Australian make. It’s clear that the vast majority are moving away from cash and cheques faster than ever before. This is happening because widespread use of new technology combined with a…

Infographic: The Digital Economy November 2016

Alice Markie — Fri, 25 Nov 2016 00:23:03 +0000

Cheques now represent just 1.2% of all non-cash transactions as Australians show a clear preference for electronic payment methods. Over the past 10 years, cheque use has declined by nearly 73% and the rate of decline is accelerating. Simultaneously, cash…

RBA data suggests 40% of credit card values in Australia are now card-not-present

Brad Pragnell — Fri, 06 Mar 2015 04:07:58 +0000

Change is pretty well the only constant when it comes to consumer payments. In Australia, we have seen a rapid uptake in contactless card use as well as increased use of online payments. Conversely, we have seen a rapid decline in personal cheque use as well as an ever-diminishing use of cash.

Monitoring changing payment usage can be notoriously difficult. The Reserve Bank of Australia (RBA) and APCA collect and publish statistics from industry participants on cheques, cards and electronic payments as well the number of ATMs and POS devices. However, other types of usage such as cash use and the split between card-present (point-of-sale) and card-not-present (internet, telephone and mail) transactions are more difficult to track. Consumers and merchants don’t regularly record or report their own payments activity – meaning we only get a partial picture of how payments use is evolving.

The return of collaboration

Chris Hamilton — Wed, 14 Jan 2015 01:35:26 +0000

As I think about payments developments in 2014, what strikes me is that the payments world is now in a phase of collaborative systemic innovation, the like of which we have not seen in 20 years.

I have written about the cyclical nature of network evolution before. It’s all about network effects - ie the reality that, in payments as in other network industries, the net value of a service is proportional to the number of other people using the service. Wherever there are large network effects, an evolutionary balance must be struck continuously between service innovation based on the existing network, and systemic innovation to enhance the network itself. The former uses new technology and/or new business thinking to improve services to end users without trying to change the network itself - because this is expensive and hard to do. Service innovation tends to be competitive in nature. A good example is Square, which innovates in the merchant/customer interaction by riding the rails of the existing card schemes.

The latter - systemic innovation - seeks to upgrade the underlying network so that new and better services can ultimately be delivered to end users. The current global enthusiasm for real-time payments is largely in this category - building new networks to (eventually) deliver better services. Because this needs a large number of existing participants to coordinate in upgrading their technology and operations at the same time, it is typically collaborative more than competitive, and government often has an important role to play.

Payment costs in Australia – early observations from new RBA research

Brad Pragnell — Mon, 05 Jan 2015 23:23:41 +0000

With complex processes and multiple parties, determining the costs of payments can be difficult. In recent years, the Reserve Bank of Australia (RBA) has taken up the challenge and released a research report on the cost of payments in Australia. This represents a long-awaited follow up to research last done in 2006.

The most recent RBA report dated December 2014 draws upon data collected in 2013 from financial institutions, businesses and consumers and seeks to quantify the overall cost of payments and the cost of various payment methods. This includes both “resource costs” (the costs to the whole economy) and “private costs” (the costs borne by consumers, merchants and financial institutions respectively).

The prospects for mobile contactless payments in Australia

Brad Pragnell — Wed, 16 Apr 2014 04:49:31 +0000

Many Australians believe their smartphone might one day replace their contactless cards. Research by Lonergan Research, on behalf of CBA, found that 73% of Australians believed their smartphone would replace their wallet by 2021. Australian financial institutions have, to date, met the demand for mobile payments through the use of NFC-enabled stickers and cases. The February 2014 announcement by VISA and MasterCard on “host card emulation”, where the secure element for a contactless payment can live in the cloud rather than in the phone, has reignited global interest in use of mobiles at point-of-sale, with a local trial being announced in Australia in March 2014. With consumer sentiment and facilitating technology shifting in its favour, what are the prospects for wide-scale embrace of mobile contactless payments in Australia?

A health plan for the payment system

Chris Hamilton — Wed, 26 Jun 2013 06:15:48 +0000

Recent data shows Australian non-cash activity overtaking cash transactions for the first time. These days almost every economic act other than a small consumer purchase requires an electronic transfer of value through the payment system by card, direct credit, direct debit, BPAY or some other method. This means that the payment system has become to the economy what your arteries and veins are to you – critical for economic health. One might think, then, that keeping the payment system “fit” (that is, secure, efficient and competitive) would be the subject of a well-developed “health plan”. Curiously, in many countries this has not been the case.

ATM statistics – are we slipping back into our old ways?

Brad Pragnell — Wed, 26 Dec 2012 22:28:48 +0000

The introduction of ATM direct charging in March 2009 has been one of the more public experiments in consumer behaviour within Australian retail payments. With three and a half years of statistics now available, we are developing a clearer view of its impact.

On the supply side, direct charging has accompanied a rise in the number of ATMs. There were 25,000 ATMs in Australia in mid-2008 and now there are over 30,000.

Despite more ATMs, direct charging has also seen a contraction in the number of withdrawals, with a drop by about 30 million withdrawals between 2008-09 and 2009-10. While this decline coincides with the GFC, the average withdrawal amount rose slightly during this period - suggesting slightly fewer but slightly larger withdrawals from ATMs as a response to direct charging.