Evolution of Consumer Payments

Research Discussion Paper
R D P 2023- 08
The Evolution of Consumer Payments

in Australia: Results from the
2022 Consumer Payments Survey
Tanya Livermore, Jack Mulqueeney, Thuong Nguyen
and Benjamin Watson
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The Evolution of Consumer Payments in Australia: Results from the
2022 Consumer Payments Survey
Tanya Livermore*, Jack Mulqueeney*, Thuong Nguyen** and Benjamin Watson**
Research Discussion Paper

2023-08
November 2023
*Note Issue Department

**Payments Policy Department
Reserve Bank of Australia
We thank Troy Gill for his helpful advice and comments as well as valuable contribution to the
planning, design and implementation of the survey. We would also like to thank Leon Berkelmans,
Ellis Connolly, Rochelle Guttmann, Brad Jones, Michelle McPhee, John Simon and Chris Thompson
for their helpful advice and comments. The views expressed in this paper are those of the authors
and do not necessarily reflect the views of the Reserve Bank of Australia. The authors are solely
responsible for any errors.
Authors: livermoret, mulqueeneyj, nguyenth and watsonb at domain rba.gov.au
External Communications: [email protected]
https://doi.org/10.47688/rdp2023-08
Abstract
The Reserve Bank conducted its sixth triennial Consumer Payments Survey (CPS), which provides
detailed information on how Australians make their payments. The 2022 CPS provides the first
comprehensive snapshot of consumer payment behaviour following the changes brought on by the
COVID-19 pandemic. The survey shows that most in-person payments are made by tapping cards
or mobile devices, even for small purchases. This means the share of in-person transactions made
with cash halved, from 32 per cent to 16 per cent, over the three years to 2022. The demographic
groups that traditionally used cash more frequently for payments – such as the elderly, those on
lower incomes and those in regional areas – saw the largest declines in cash use. Cash usage has
generally been replaced with card payments. While Australians are aware of and use a range of
other newer payment methods, such as digital wallets and buy now, pay later services, they still
make up a small share of payments.
JEL Classification Numbers: D12, D14, E42

Keywords: consumer payment choice, consumer survey, dual network debit cards, method of
payment, payment systems
Table of Contents
1. Introduction 1
2. Survey Overview 1
3. Key Trends in Consumer Payments 2
4. Cash 7
4.1 Cash payments 7
4.2 Cash users and their attitudes towards cash 10
4.3 Cash holdings 13
4.4 Cash access 14
5. Card Payments 17
5.1 Card use 17
5.2 Credit and debit cards 20
5.3 Contactless and mobile card payments 23
5.4 Surcharging of card transactions 27
5.5 Dual network debit cards 29
6. Online and Automatic Payments 34

6.1 Online 34
6.2 Automatic payments 36
7. Cheques 37
8. Other Payment Methods 38

8.1 Consumer awareness and use 38
8.2 Cryptocurrency payments 40
8.3 Buy now, pay later 41
8.4 Account-to-account payments, PayID and digital wallets 43
8.5 Transport cards 46
Appendix A: Survey Methodology 47
References 54
Copyright and Disclaimer Notice 55

1. Introduction
The Reserve Bank conducted its sixth triennial Consumer Payments Survey (CPS) in October to early
December 2022. The CPS provides comprehensive data on how Australian consumers make their
payments as well as qualitative information on payment preferences and attitudes. It is one of the
main sources of information on the use of and attitudes towards different payment methods in
Australia. A representative sample of just under 1,000 people participated in the 2022 CPS.
The way in which Australians are making payments is changing. New payment methods are
emerging, often enabled by mobile technology, while transactional use of cash is declining.
Moreover, the COVID-19 pandemic induced substantial changes in payment behaviour. The
2022 survey is the first CPS to be conducted since the pandemic and so provides a valuable snapshot
of its effect on consumers’ payment patterns.
2. Survey Overview
The CPS is a national cross-sectional survey that has been conducted every three years since 2007.1
The 2022 CPS comprised three sections: a pre-diary questionnaire about the demographic
characteristics of respondents; a payments diary; and a post-survey questionnaire focusing on
respondents' payment preferences and attitudes. Participants recorded every transaction they made
for seven days in the payments diary. The CPS provides unique insights into Australian consumers’
payments behaviour and their changing preferences via both qualitative questions and quantitative
analysis of the payments diaries.
The seven-day payments diary captured detailed information on every transaction that a consumer
made in a week. The information included:
• the payment method – for example, debit card, credit card, cash or bank transfer
• the payment location – whether in-person or online
• the execution of the payment method – for example, by inserting a card into the terminal, or
tapping a physical card or mobile device
• the payment purpose – for example, supermarket, household bills, leisure or transport.
The survey was delivered online for most respondents, except for participants without internet
access who were recruited by telephone to complete a paper-based survey. Participants were
recruited to the survey to ensure that the sample was consistent with population benchmarks for
age, sex, household income, state of residence, credit card ownership and internet access (where
necessary, the Reserve Bank weighted responses to align the sample with these benchmarks; see
Appendix A.2 for more information).
1 For a discussion of the 2017 and 2019 CPS results, see Doyle et al (2017) and Caddy, Delaney and Fisher (2020). This
discussion paper builds on material released in the June 2023 Bulletin, see Mulqueeney and Livermore (2023) and
Nguyen and Watson (2023).
2
A total of 999 people participated in the 2022 CPS, recording around 11,000 payments, 400 cash
withdrawals and 1,900 automatic payments in their seven-day diary periods. For further details on
the survey, see Appendix A.
3. Key Trends in Consumer Payments
The 2022 CPS showed a continuation of previous trends, with the longer-run shifts to electronic
payment methods and away from cash accelerated by the pandemic. Debit cards were the most
frequently used means of payment in 2022, making up half of all consumer payments (Figure 1).
Overall, payment cards – debit and credit cards combined – were used for three-quarters of
consumer payments in 2022, compared with 63 per cent three years earlier.
Figure 1: Cash and Card Payments

Share of number of payments
Source: RBA calculations, based on data from Colmar Brunton, Ipsos and Roy Morgan Research.
The trend towards increased use of electronic payment methods has been driven by the development
of more convenient and seamless payment technology as well as changes in consumer behaviour,
with the latter accelerated by the pandemic. In particular, payment cards now permit convenient
contactless payments, where the cardholder can simply ‘tap’ the payment terminal, which speeds
up transactions. There is wide merchant acceptance of contactless card payments, facilitated in
recent years by new payment providers, including for low-value payments; this has made it
unnecessary for many consumers to carry cash, eliminating the need to regularly top up their cash
holdings. Innovation in the payments space has also meant that consumers can now make
contactless card payments using their mobile phone, further increasing the convenience of card
payments and decreasing the need to carry a physical wallet and cash. The share of in-person
payments made by tapping a physical card or mobile device on a payment terminal increased to
77 per cent in 2022, from 56 per cent in 2019.
3
Consumers are using cards more frequently for payments of all sizes and the adoption of contactless
functionality has facilitated particularly strong growth in the use of cards for low-value transactions
in recent years. For example, the share of in-person payments of $10 or less that were made with
cards rose by over 20 percentage points relative to three years earlier, to 73 per cent in 2022. There
was also a further shift to making payments online rather than in person, with 18 per cent of
consumer payments made online in 2022 up from 13 per cent in 2019, with most of these payments
made using cards. Other means of online payment such as BPAY and internet banking applications
account for relatively small shares of the number of consumer payments but a higher share when
measured by the value of transactions (Table 1).
Table 1: Consumer Payment Methods

Share of total payments
2007 2010 2013 2016 2019 2022
Number of payments
Cash 69 62 47 37 27 13
Cards 26 31 43 52 63 76
Debit cards 15 22 24 30 44 51
Credit and charge cards 11 9 19 22 19 26
BPAY 2 3 3 2 2 2
Internet/phone banking(a) na 2 2 1 3 3
PayPal na 1 3 3 2 2
Cheque 1 1 0.4 0.2 0.2 0.1
Other(b) 1 1 2 4 2 2
Value of payments
Cash 38 29 18 18 11 8
Cards 43 43 53 54 61 65
Debit cards 21 27 22 26 36 39
Credit and charge cards 23 16 31 28 25 26
BPAY 10 10 11 8 9 8
Internet/phone banking(a) na 12 10 10 14 14
PayPal na 1 2 4 2 3
Cheque 6 3 2 2 2 0.05
Other(b) 3 3 5 3 2 3
Notes: Excludes payments over $9,999, transfers (payments to family and friends), transport cards and automatic payments.
(a) Payments made using banks’ internet or telephone facilities; does not include other payments made using the internet.
(b) ‘Other’ methods include prepaid, gift and welfare cards, bank cheques, money orders, ‘buy now, pay later’ and Cabcharge.
With Australian consumers increasingly opting to make their payments electronically, the trend
decline in transactional use of cash has continued. In 2022, there were fewer consumers using cash
exclusively and more that only used debit or credit cards (Figure 2). In past surveys consumers were
more likely to have used multiple payment methods during the diary week, such as cash at some
merchants and cards at other merchants. But consumers can now more easily rely on just cards for
their day-to-day payments. This is because some merchants that previously only accepted cash,
such as small food retailers, now accept card payments, and card payments are increasingly
convenient due to contactless and mobile technology.
4
Figure 2: Use of One Payment Method Only

In-person payments, share of respondents
Note: Excludes respondents who made no in-person payments in the diary week.
Compared with 2019, consumers placed more importance on transaction speed when making their
day-to-day payments, with around one-third of respondents selecting this as the most important
factor when making an in-person payment (Figure 3). This result was consistent with consumers’
shift towards contactless card payments over the same period.
The share of respondents indicating their preference for using own funds as the most important
factor declined by 9 percentage points, which could partly explain why the ongoing shift towards
debit card use slowed in this latest survey. There was also an increase in the share of respondents
nominating ‘reward points’ as their most important factor in 2022, a factor associated with credit
card use.
5
Figure 3: Influence on In-person Payment Method Choice

Most important factor, share of respondents
Source: RBA calculations, based on data from Ipsos and Roy Morgan Research.
Nonetheless, the 2022 CPS results showed that the majority of consumers continued to value
merchant acceptance of debit cards, with around 90 per cent of respondents indicating that it was
‘very important’ or ‘important’ that a merchant accepts debit card payments (Figure 4). Merchant
acceptance of cash was less important than acceptance of debit cards, but was relatively important
for small purchases. By contrast, credit cards and buy now, pay later (BNPL) services were valued
more by consumers for large purchases than small purchases. Even so, only around one-third of
consumers felt that it was ‘very important’ or ‘important’ for merchants to accept BNPL for large
purchases. This result is consistent with BNPL payments making up just 0.7 per cent of the number
of payments in 2022.
6
Figure 4: Merchant Payments Acceptance

By importance, share of respondents, 2022
Source: RBA calculations, based on data from Ipsos.
Similar trends in consumer payments have been apparent in several other economies. Data from
broadly similar surveys conducted in a number of other advanced economies show that consumers
globally are shifting away from cash to cards, although there are also some notable differences
across economies (Figure 5).2 Sweden and Norway are prominent examples of jurisdictions where
cash is used for a relatively small proportion of consumer payments, whereas cash is more commonly
used in some euro area economies.3 China is another example of a country in which there has been
a marked increase in the relative use of electronic payment methods, facilitated by the widespread
adoption of digital wallet services.
2 Differences in survey design and coverage mean that the results of these surveys are not fully comparable. See
Bagnall, Chong and Smith (2011) for an earlier discussion of the results of harmonised payment survey data.
3 Governments and central banks in some countries – such as the Netherlands, Norway and the United Kingdom – have
implemented or are considering a range of policy measures designed to ensure ongoing access to cash services, such
as laws requiring banks to provide cash withdrawal services.
7
Figure 5: Trends in Card and Cash Payments

Notes: Cash and card do not sum to 100. Observations are not directly comparable due to differing survey methods and inclusions
across economies.
Sources: Bank of Canada; Colmar Brunton; De Nederlandsche Bank; Deutsche Bundesbank; European Central Bank; Federal Reserve
Bank of San Francisco; Ipsos; Norges Bank; RBA; Roy Morgan Research; Sveriges Riksbank.
4. Cash
4.1 Cash payments
The decline of transactional cash use accelerated over the three years to 2022, with cash accounting
for 13 per cent of the total number of consumer payments, compared to 27 per cent in 2019
(Figure 6). When measured by the value of consumer payments, the share of total payments made
with cash declined more modestly from 11 per cent to 8 per cent. For in-person transactions,
Australians halved their share of cash payments by number from 32 per cent to 16 per cent.
The decline in cash use was particularly pronounced for lower-value transactions, with consumers
now more likely to use other payment methods for these payments. Indeed, non-cash methods (of
which cards make up the overwhelming majority) overtook cash as the most frequently used
payment method for all payment sizes for the first time in the 2022 CPS (Figure 7). Across all
payment sizes, cash payments are most likely for round value transactions where change or coins
are less likely to be needed (i.e. $5, $10, $20, $50 and $100 payments). The shift away from cash
for lower-value payments reflects increased adoption of contactless electronic payments during and
following the pandemic.
8
Figure 6: Cash Payments

Share of total payments
Figure 7: Cash Payments by Transaction Size

In-person payments under $100
Note: $5-centred moving average; for example, the $6 share is an average of the payment method share at $4, $5, $6, $7 and $8.
9
The decline in cash use was evident across key demographic groups, with consumers of all ages,
income groups and locations using cash less frequently than previously (Figure 8). There was a
particularly pronounced shift away from cash for groups typically associated with higher cash use,
such as older age groups, those in regional and/or remote Australia, and those with lower household
incomes. For example, consumers aged over 50 made just under 22 per cent of their in-person
weekly payments in cash in 2022, compared with around 42 per cent three years earlier (and around
74 per cent in 2007). Similar declines were observed for people with lower household incomes and
in regional/remote Australia.
Figure 8: In-person Cash Use

Share of payments by demographic
Note: (a) Age-adjusted income quartiles.

The CPS suggests that the decline in cash use was accelerated by the pandemic. If cash use had
followed its pre-pandemic trend, we would have expected the share of the number of in-person
transactions made with cash to be 6 percentage points higher in 2022 (at 22 per cent) than
eventuated (16 per cent). Higher frequency data – such as monthly aggregate ATM withdrawals
across Australia and alternative surveys – indicate that the steep decline in cash use was due to a
sharp decline at the beginning of the pandemic and then a relatively steady level of cash use at the
lower level (Guttmann, Livermore and Zhang 2023). This suggests a ‘bring forward’ of a decline in
cash use, rather than a change in trend per se.
The pandemic may have played a role in the relatively larger cash use decline for the elderly and
those in regional and/or remote Australia. During the pandemic, consumers in general shifted away
from cash partly because of hygiene concerns with handling cash. Fears of virus transmission were
likely more acute for those in certain demographics, specifically the elderly (since the consequences
are greater) and those in regional/remote areas (where distances to medical care may be greater)
(McGrail and Humphreys 2015; Mueller, McNamara and Sinclair 2020).
10
4.2 Cash users and their attitudes towards cash
Most Australians used cash infrequently in 2022, if at all. Indeed, just over half of the respondents
did not use cash at all during the diary week (‘no cash user’) in 2022, up from about one-third in
2019 and around one-fifth in 2016 (Figure 9). Including no cash users, almost three-quarters of
Australians used cash for 20 per cent or less of their in-person transactions (‘low cash users’) in
2022, compared with half in 2019. The higher share of Australians using cash infrequently or not at
all is consistent both with consumers preferring to pay with electronic methods and industry policies
that encouraged and facilitated non-cash payment methods.
Figure 9: Cash Use Intensity

Share of respondents by category
Note: Category based on share of in-person payments made with cash (no cash = 0 per cent, 0 per cent < low-but-some ≤ 20 per
cent, 20 per cent < intermediate < 80 per cent, 80 per cent ≤ high-but-not-all < 100 per cent, all cash = 100 per cent).
However, some people still use cash for a significant share of their in-person payments. For example,
around 5 per cent of CPS participants used cash for all their in-person transactions (‘all cash users’)
in 2022 – the share having steadily declined from 16 per cent of people in 2007. Including all cash
users, the share of people who used cash for 80 per cent or more of their in-person payments (‘high
cash users’) declined to 7 per cent in 2022, from a little under half of the respondents in 2007.
11
The no cash and all cash user groups represent most of the low and high cash user groups
respectively.4 In the remainder of this paper, we focus the discussion on low cash users (including
no cash users) and high cash users (including all cash users).5
While about 80 per cent of low cash users say they would be largely unaffected if cash became hard
to use or access, a sizeable minority indicate some inconvenience (Figure 10). Of those who would
experience a ‘major inconvenience’ or ‘genuine hardship’, high cash users are more likely to cite
privacy/security concerns or family/budget reasons for needing cash (Figure 11).
Figure 10: Effects of No Cash

Share of respondents by cash use intensity, 2022
Note: Category based on share of in-person payments made with cash (low ≤ 20 per cent, high ≥ 80 per cent).
4 This is somewhat expected, since the average number of transactions per person in the diary is relatively low (about
13). Therefore, small changes in the absolute number of cash transactions cause large changes in the cash share of
transactions.
5 Generally, results for the high and all, and the low and no, cash user groups are similar.
12
Figure 11: Why Do You Need to Use Cash?

Share of respondents by reason and cash use intensity, 2022
Notes: Share of respondents answering that they would experience a major inconvenience or genuine hardship to the question
‘Would it be difficult for you if shops stopped accepting cash and you could no longer withdraw cash?’. ‘Other’ category
omitted. Category based on share of in-person payments made with cash (low ≤ 20 per cent, high ≥ 80 per cent). Payment
method access/use limitation includes having no non-cash way to pay, not having enough money in bank account, not
confident with non-cash methods, having a disability that makes it difficult to use non-cash methods, poor internet access,
some businesses only accept cash and unable to get a bank account.
While barriers to non-cash methods, like poor internet access or that some merchants only accept
cash, still prevent some people from adopting other payment methods, they are relatively less
important than in the past. For example, about 6 per cent of people stated they needed cash because
‘they have no other way to pay’ in 2019 – that share was under 1 per cent in 2022. One possible
structural factor for this shift is that differences in ownership of internet-compatible mobile phones
between the cash user groups are less evident than they were in 2019 (Figure 12). Additionally,
government investment in regional/remote telecommunications infrastructure has increased
(Australian Government 2022).
13
Figure 12: Has Internet-compatible Mobile Phone

Share of respondents by cash use intensity
Note: Category based on share of in-person payments made with cash (low ≤ 20 per cent, 20 per cent < intermediate < 80 per
cent, high ≥ 80 per cent).
4.3 Cash holdings
Consistent with lower transactional cash use, fewer people held cash in their wallet or purse
compared with 2019. Indeed, the share of people holding no cash on their person increased to
29 per cent in 2022 from 22 per cent in 2019 (Figure 13).6 The share of lower-value holdings (under
$50) decreased most, while higher-value on-person holdings remained relatively stable. The share
of people holding cash in other places was unchanged from 2019 at around 40 per cent.
The stability in out-of-wallet cash holdings between 2019 and 2022, despite the sharp decline in
transactional cash usage, is consistent with strong precautionary or store-of-wealth demand for
banknotes. This is seen most in the growth of high denomination banknotes in circulation,
particularly during times of crisis (Guttmann et al 2023). Indeed, the CPS suggests that many
consumers perceive cash to be important as a backup payment method for when electronic payment
methods are unusable. For example, of the people who held cash in their wallet, the most important
reason for doing so – other than for day-to-day purchases – was for emergency transactions (about
20 per cent of respondents), followed by concerns about payments systems reliability. Emergency
transactions was also the most important reason for holding cash outside the wallet.
6 This is the value of wallet cash holdings as reported at the end of the payments diary. In past research, the
Reserve Bank reported the value of wallet cash holdings as reported at the beginning of the payments diary. The
change occurred because of issues in data collection during the 2022 survey.
14
Figure 13: Wallet Cash Holdings

Share of respondents
4.4 Cash access
Consistent with the decline in the use of cash for transactions, the share of respondents making
cash top-ups (i.e. receiving or withdrawing cash) during the survey week decreased: 29 per cent of
respondents in the 2022 survey made at least one top-up, compared with 48 per cent in 2019 and
86 per cent in 2007 (Table 2). Similarly, the average number of top-ups halved – from 0.8 top-ups
per week in 2019 to 0.4 per week in 2022. By age, older individuals were more likely to make at
least one top-up during the week. By household income, those with lower income made more top-
ups, although the relationship between income and top-ups is weaker than with age. In any case,
these results are consistent with more transactional cash use in these demographics.
Table 2: Cash Top-ups

2007 2010 2013 2016 2019 2022
Share of respondents making one 86 72 76 45 48 29

or more top-ups (%)
Average number of top-ups per 1.4 1.6 1.5 0.7 0.8 0.4
person per week
Median value of top-ups ($) 100 100 60 100 80 100
15
To complement these top-ups data, in the 2022 CPS, respondents were asked to reflect on where
they usually, and where they most prefer to, access their cash even if they did not do so during the
survey week.7 Across all cash user groups, people usually access cash from ATMs or cash out at the
point-of-sale; these were also cited as the two most preferred ways to access cash (Figure 14).
Figure 14: Most Preferred Cash Access Point

Share of respondents, 2022
Note: Category based on share of in-person payments made with cash (low ≤ 20 per cent, high ≥ 80 per cent).
By cash use intensity, high cash users were more likely to state that they usually, and most prefer
to, access cash at a bank branch or Bank@Post than low cash users. One possible reason this could
be the case is if high cash users prefer the face-to-face service offered at these outlets. High cash
users may also prefer bank branches because they are not faced with withdrawal limits. Low cash
users, on the other hand, may prioritise convenience of the nearest cash access point over the
features of the service. The recorded top-ups in the diary data reinforce this finding – of those who
recorded a top-up, 93 per cent of high cash users topped-up from their most preferred top-up
source, compared to about 70 per cent for low cash users.
The CPS suggests that the convenience of access to cash services differs between withdrawal and
deposit services, although the difference has lessened in the recent survey. Almost all people use
cash withdrawal services, and access is generally rated as convenient or very convenient; however,
the share rating withdrawal services as convenient or very convenient has declined to 85 per cent
in 2022 from 89 per cent in 2019 (Figure 15). By comparison, only around three-quarters of people
7 The declining frequency of cash top-ups has reduced the CPS’s visibility of the access points that respondents use and
so these questions were asked to address this emerging gap.
16
use deposit services, and a smaller share of people rate these as convenient relative to withdrawal
services. In 2022, 67 per cent of people rated deposit services as convenient or very convenient,
which is an increase from 62 per cent in 2019. The shares of people who don’t use withdrawal and
deposit services increased since 2019, consistent with the decline in transactional cash use.
Figure 15: Access to Cash Services

Share of respondents using these services
Important vulnerabilities in cash access are emerging: the highest cash users and those in
regional/remote areas find their access to both withdrawal and deposit services more inconvenient
than they did in 2019 (Figure 16). For those in regional/remote areas, it is likely that the declining
number of cash access points, and the distance to the next alternative, contributed to the increased
inconvenience of access. While the decline in bank branches has been mostly concentrated in
metropolitan areas, the greater distance to the ‘next closest’ access point in regional/remote
Australia means closures are more acutely felt in these areas (Guttmann et al 2023).
For more intensive cash users, the ways they prefer to access cash, particularly via bank branches,
may explain the decreased convenience of cash access. Access to bank branches has declined in
recent years (Guttmann et al 2023). Indeed, other access points are not perfect substitutes for bank
branches, which offer a broader range of services (e.g. no withdrawal limits). This might mean when
a branch closes, people who rely on those services find cash access more inconvenient than before.
17
Figure 16: Inconvenience of Cash Services

Share of respondents who use these services across user group and location
Note: Share of respondents answering that deposit or withdrawal services are inconvenient or very inconvenient.
5. Card Payments
5.1 Card use
The results of the 2022 CPS show that Australians continued to shift to using cards for their day-to-
day transactions. Since the CPS was first conducted in 2007, cards have been replacing cash and
have become the dominant payment method.8 In 2022, three-quarters of payments were made with
cards – three times the share in 2007 (Table 1). In value terms, payments made using cards
accounted for two-thirds of the total value of payments in 2022, an increase of 24 percentage points
from 2007. The increase in card usage mirrors the decline in cash usage.
The rising popularity of cards reflects both changing consumer preferences and widespread
acceptance of electronic payments by merchants. Australian consumers have increasingly preferred
to use cards to make payments as new technology and innovation in the payments space have made
cards more convenient and easier to use. Cards have become very popular for Australian consumers:
99 per cent of respondents in the 2022 CPS reported that they held at least one debit and/or credit
card and just under half indicated that they held both types of cards. Merchant acceptance is also
8 Note that ‘card payments’ in this paper generally refer to transactions where respondents reported that they directly
used a physical (plastic) debit or credit card or a card stored in a mobile wallet. Where payment cards are used
indirectly, such as using a linked card via PayPal or a BNPL service, the payment is captured in data for that payment
method rather than as a card payment. For comparability with previous surveys, prepaid/gift cards are not included
in the figures cited for debit and credit card payments; these cards were used for less than ½ per cent of the number
of payments in the 2022 CPS.
18
very high; a Reserve Bank survey in 2022 found that 97 per cent of retail merchants accepted card
payments.9 The high rate of card acceptance by merchants partly reflects the ubiquity of card
ownership and use among consumers, as well as reductions in merchant acceptance fees over time
and Reserve Bank reforms making it possible for merchants to surcharge for card payments (Gill,
Holland and Wiley 2022). Wider card acceptance in recent years also appears to have been facilitated
by new payments providers catering to small and micro merchants, as well as more convenient
technology such as simpler point-of-sale terminals and mobile payment terminals.
Cards are now used widely across demographic groups, though some important differences remain.
Younger people use cards most intensively, with consumers aged 18–29 years using cards for around
85 per cent of their payments (Figure 17, left panel). Consumers aged 65 and above were historically
high cash users; however, they now use cards for nearly two-thirds of their payments. Compared
with 2019, the share of transactions made using cards rose most strongly for consumers aged
40 years and older, with the rise mainly driven by a strong increase in card payments for low-value
transactions. The increase in card use was more modest for consumers under 40, as for this group
the share of low-value payments made using cards had already reached a high level in 2019.
Figure 17: Card Payments

Share of total number of payments in each category
Note: Because of the overlap between age and income groups, the data for income quartiles are adjusted for respondent’s age.
9 The Reserve Bank conducts a phone survey of around 350 businesses on an ad hoc basis to assess merchants’
acceptance of cash and card. For details, see Guttmann et al (2023).
19
The rise in the share of card payments between 2019 and 2022 was evident across all income groups
(Figure 17, right panel). The growth in card usage was strongest in the middle-income groups
(i.e. the second and third income quartiles). High-income households had the greatest propensity to
use cards, with cards accounting for 82 per cent of their payments, compared with 69 per cent for
those in the lowest income quartile.
In 2022, cards were used more frequently than in 2019 for payments of nearly all sizes. The increase
in relative card use was most pronounced for lower-value transactions (Table 3). The one category
where the share of card payments declined was for payments over $500, as more of these large
transactions were made using other payment methods such as bank transfers and PayPal.
Table 3: Card Payments for Different Types of Purchases

2007 2010 2013 2016 2019 2022
Payment value ($)
1–10 4 7 18 32 52 72
11–20 21 26 39 52 64 78
21–50 40 43 54 61 70 79
51–100 54 59 63 65 74 79
101–500 51 53 59 62 64 74
501+ 49 41 51 50 52 49
Broad merchant categories
Supermarket 39 46 59 63 74 84
Food retail 10 14 27 43 62 81
Goods retail 35 40 48 55 67 76
Transport(a) 15 17 34 49 71 87
Petrol/service station 51 54 66 67 76 84
Leisure/entertainment 12 19 36 37 50 64
Holiday 65 69 74 79 81 78
Bills(b) 28 22 33 35 29 33
Services 27 33 38 46 48 62
Other 25 30 41 47 56 66
Notes: Excludes payments over $9 999, transfers (payments to family and friends) and automatic payments.
(a) Excludes transport card payments (see Section 8.5).
(b) Excludes bill payments that are automatically withdrawn from a bank account (see Section 6.2).
The 2022 CPS showed that cards were the predominant payment method at almost all types of
businesses (Table 3). Cards accounted for more than 80 per cent of transactions at supermarkets,
food retailers, transport businesses, and petrol and service stations. The high share of card payments
at supermarkets may reflect the convenience of using a card at these businesses – for instance,
supermarkets were among the first businesses to introduce contactless card terminals in Australia
and have recently introduced self-service checkouts that do not accept cash. In addition, many
supermarkets do not surcharge card payments, making this payment method a more attractive
choice than at businesses that do surcharge. Card payments are used least for household bills, with
20
consumers tending to use lower-cost payment methods such as bank transfers and BPAY for these
payments.
5.2 Credit and debit cards
The increase in card usage over the last decade has reflected greater use of both debit and credit
cards. Since 2007, consumers have consistently increased their usage of debit cards. Payments made
using debit cards accounted for half of all payments in 2022 – more than three times their share in
2007. The increased use was initially supported by the introduction of debit cards that provided
much of the same payment functionality as credit cards, such as the ability to make online payments.
More recently, in response to the pandemic, banks sent debit cards to Australian account holders
who did not have a linked debit card (e.g. passbook holders), making debit cards even more widely
available. The stronger uptake of debit cards partly reflects Australian consumers preferring to use
their own funds from their deposit account, rather than borrowed funds from a credit card.
Particularly over the last few years, younger consumers have consistently shown a greater
preference for using their own funds. In addition, the decline in the generosity of credit card reward
programs and generally higher surcharges for credit cards than debit cards have meant that
consumers have opted to use debit cards more often as they switch away from cash payments.10
The usage of credit and debit cards varies by household income. Lower-income households use debit
cards and cash more frequently than higher-income households. In 2022, consumers in the lowest
income quartile made 55 per cent of their transactions with debit cards, compared with 45 per cent
for those in the highest income quartile (Figure 18, left panel). By contrast, consumers in the highest
income quartile used credit cards for around one-third of their total payments, which is three times
the share for consumers in the lowest income quartile. This may reflect higher-income households
being more likely to meet the lending standards for a credit card, as well as debit cards and cash
being used as budgeting tools for lower-income households.
10 A surcharge is a fee merchants charge consumers for accepting a particular payment method.
21
Figure 18: Debit and Credit Card Payments

Share of total number of payments in each category, 2022
Note: Because of the overlap between age and income groups, the data for income quartiles are adjusted for respondent’s age.
The use of credit and debit cards diverges across age groups. Younger consumers are more likely
to use debit cards more intensively whereas older consumers tend to use credit cards and cash more
frequently to make payments. In 2022, consumers aged 18–29 made three-quarters of their total
transactions with debit cards – more than double the share for consumers over 65 (Figure 18, right
panel). While consumers of all ages used debit cards more frequently than they did in the previous
survey, the recent increase has been most pronounced among consumers aged under 30 and
over 65. The share of payments made using debit cards by these groups increased by around
10 percentage points between the 2019 and 2022 surveys. For consumers aged over 40 the share
of payments using credit cards increased significantly. However, consumers aged under 40 used
credit cards less frequently than they did in 2019 (Figure 19).
Consumers aged under 30 made more than three-quarters of their payments using debit cards
(Figure 20). While this age group are less likely to hold a credit card than those in other age cohorts,
younger people that own a credit card still made over half of their payments using a debit card.11 In
contrast, consumers aged over 50 made around one-third of their payments with a debit card, with
a less pronounced difference in debit card use between those who held a credit card and those who
did not.
11 18 per cent of respondents aged under 30 owned a credit card versus 61 per cent of respondents aged over 30.
22
Figure 19: Change in Share by Number of Debit and Credit Card Payments
By age, 2019 to 2022
Figure 20: Debit Card Use by Age

Share of total number of payments, 2022

23
5.3 Contactless and mobile card payments
The way Australians undertake their payments has changed significantly over the past decade. Most
in-person card payments are now made using contactless functionality, including through the use of
mobile devices.12 In 2022, these payments made up 95 per cent of in-person card payments, an
increase of 10 percentage points from 2019 (Figure 21). By contrast, when the CPS was first
conducted in 2007, almost all in-person card transactions were made by swiping or inserting the
card into a terminal at the store checkout (and providing a personal identification number (PIN) or
signature for verification). In 2022, these payments made up only 5 per cent of in-person card
payments.
Figure 21: Card Payments by Channel

Share of number of in-person card payments
Most contactless payments were initiated by tapping a physical card on a point-of-sale terminal. But
the use of mobile devices to make contactless payments – by tapping a smartphone or other
payment-enabled mobile device, such as a watch, ring or other ‘wearable’ device – increased sharply
from a low base. Contactless mobile payments accounted for nearly one-third of in-person card
payments in 2022, up from just 8 per cent in 2019 (Figure 21). The increased adoption of contactless
mobile payments has been supported by this payment option becoming more widely available to
consumers, due to the increased availability of devices equipped with mobile payment functionality
combined with most card issuers supporting the storage of their cards in mobile wallets (such as
those provided by Apple, Google and Samsung). Adoption has also been supported by consumers’
12 Consumers can store their card details on mobile devices, like smartphones, in applications called ‘mobile wallets’.
Mobile wallets allow in-person payments to be made by using the near field communication (NFC) functionality of the
mobile device by tapping the device on or near a compatible terminal. Mobile wallets can sometimes also be used to
make online payments.
24
greater awareness of this payment method, as well as widespread merchant acceptance of

contactless card payments more generally.
The pandemic also contributed to greater adoption of contactless payments by changing the
behaviour of consumers, merchants and payment providers. Consumers shifted towards electronic
payment methods because of hygiene concerns with handling cash and an increase in online
payments due to lockdowns and social distancing. During the pandemic, the payments industry also
facilitated a move to contactless transactions by increasing the transaction limit below which a PIN
was not required for a contactless card payment from $100 to $200.13 Between 2019 and 2022, the
share of contactless payments increased by 35 percentage points for payments over $100 – a
stronger rise than for lower-value transactions (Figure 22). Consumers mainly switched from
inserting a card to using contactless payments for these larger payments. Nonetheless, the use of
contactless functionality by consumers also increased significantly for lower-value transactions. For
example, the share of in-person payments of $10 or less made by tapping a card or a mobile device
increased by 24 percentage points between 2019 and 2022, to 48 per cent. For payments of this
size, consumers generally substituted from cash to contactless mobile device payments.
Figure 22: In-person Payments

Change in share of number of payments by value, 2019 to 2022
The use of mobile wallets increased for Australians of all ages between 2019 and 2022. In 2022,
more than one-third of consumers used a mobile device to make a contactless payment in the diary
week – an increase of 25 percentage points from 2019. The increase in adoption was particularly
pronounced for younger consumers. Mobile payments were used by nearly two-thirds of Australians
13 While the increase in the contactless transaction limit not requiring a PIN was only meant to be temporary, in the
2022 CPS the increased limit was still in effect for many transactions.
25
aged between 18 and 29 in 2022, up from less than 20 per cent in 2019. For consumers aged 65
and over, only 9 per cent made a mobile payment during the diary week, although this was triple
the share in 2019 (Figure 23, top panel). In 2022, mobile devices were used intensively by those
consumers who had adopted mobile payments, and this trend was evident across all age groups –
mobile device payments accounted for more than half of such consumers’ in-person payments. Users
aged over 65 recorded a particularly strong increase in their intensity of mobile payment usage
between 2019 and 2022 (Figure 23, bottom panel).
Figure 23: Mobile Device Use by Age

2019 versus 2022
Note: Only includes respondents that made mobile device payments at least once in the diary week.
In addition to the diary data, all respondents were asked if they stored each of their payment cards
in a mobile wallet (such as Apple Wallet, Google Wallet, Samsung Wallet etc). Around half of
respondents stated that they had a card stored in a mobile wallet in 2022, with younger people
reporting the highest shares (Figure 24, top panel). Mobile wallets have become more popular for
consumers of all age groups since 2019 (Figure 24, bottom panel). Having a single card stored in a
mobile wallet is more common than having multiple cards stored. Nearly 90 per cent of CPS
respondents indicated that they were at least aware of the ability to make contactless payments via
a payments-enabled mobile device.
26
Figure 24: Use of Mobile Wallets by Age

Australia has adopted contactless payments earlier and reached near universal uptake before some
other countries (Figure 25). Besides consumer demand for convenience, the rise of contactless
payments in Australia has been strongly supported by the fast rollout of contactless-enabled cards
and terminals by card schemes, card issuers and payment service providers. Early adoption by the
hospitality industry and large merchants such as supermarkets and department stores also facilitated
consumer uptake. As discussed earlier, the pandemic also spurred greater use of electronic
payments, including contactless payments.
27
Figure 25: Contactless Card Payments

Share of in-person card payments
Note: Observations are not directly comparable due to differing survey methods and inclusions across economies.
Sources: BIS; RBA calculations based on data from Colmar Brunton, Ipsos and Roy Morgan Research.
5.4 Surcharging of card transactions
To recover the cost of accepting card payments, a merchant may apply an additional fee, or
surcharge. The Reserve Bank first enacted rules in 2003 to require card schemes to remove their
‘no-surcharge’ rules, thereby freeing merchants to surcharge card payments. The Reserve Bank’s
rules are aimed at supporting the efficiency of the payments system, by ensuring that consumers
are encouraged to use the lowest cost payment instrument. Changes to the Reserve Bank’s
surcharging rules were made following a review in 2015–2016, which reduced the allowed size of
surcharges levied by merchants in some industries.
The survey showed that the frequency of surcharging increased from 2019 to 2022. CPS participants
reported that a surcharge was paid on 7 per cent of card transactions in 2022 (Table 4), up from
around 5 per cent of card transactions in 2019. When measured as a percentage of the transaction
value, the median surcharge reported was 1.5 per cent, which was 50 basis points lower than three
years earlier. In value terms, the median surcharge declined from 80¢ to 50¢.14 The reduction in
median surcharges is consistent with the increased use of cards for lower-value purchases between
2019 and 2022, as well as the decline in the average cost of card payments.
In past surveys, a number of factors were associated with whether a surcharge was paid by
consumers, such as the type of card used and the environment in which the payment was made
(e.g. online or in person). However, these factors appear to have diminished in importance in the
latest survey. For instance, in the 2022 CPS surcharges were paid equally as often on credit card
14 Numbers differ to those published in Caddy et al (2020) because of data cleaning approach.
28
and debit card payments (Table 4); in previous years, credit card payments were surcharged more
often. The increased prevalence of debit card payments, greater use of payment plans that charge
merchants a single percentage rate for accepting all card types, and the emergence of payment
providers that offer automatic surcharging may have all contributed to the convergence in
surcharging frequency on credit and debit cards. Similarly, while online payments continued to be
surcharged more frequently than in-person payments, the difference in frequency was narrower
than in past surveys. Consumers who held a credit card that offered rewards points – which tend to
be relatively expensive for merchants to accept – were more likely to have paid a card surcharge
than those who owned a non-rewards credit card; however, once again the difference was smaller
than in past surveys.
Table 4: Card Surcharges Paid

Per cent of card payments where a surcharge was paid
2019 2022
All card payments 4.7 7.3
Credit cards 5.5 7.3
Debit cards 4.3 7.3
Reward cardholder status
Owns a rewards card 5.3 7.5
Does not own a rewards card 3.7 6.6
By payment channel
In-person 4.0 7.1
Online 9.2 8.5
Notes: Excludes payments over $9,999, transfers (payments to family and friends) and automatic payments. Numbers published in
Caddy et al (2020) differ because of data cleaning approach.
Respondents were also asked about their typical response when they discover that a merchant levies
a surcharge on some payment methods. Around 45 per cent of consumers said they would choose
a non-surcharged method when faced with a surcharge (Figure 26). This level indicates that there
is some scope for merchants to encourage consumers to switch to a different, lower-cost payment
method by applying a surcharge on certain payments. Nonetheless, in 2022 a greater share of
respondents reported being likely to accept surcharges than in 2019. The increased acceptance of
surcharges by consumers may reflect the fact that fewer consumers carried a non-surcharged
payment method such as cash. Around 20 per cent of consumers would avoid shopping at a
merchant that levies a surcharge. This possibility of losing customers helps explain why many
merchants choose not to apply a surcharge on card payments.
29
Figure 26: Response to Potential Payment Surcharge

5.5 Dual network debit cards
In the 2022 CPS the Reserve Bank included some new questions to gauge consumer awareness of
dual network debit cards (DNDCs). These questions will help inform policy as the Reserve Bank
seeks to increase competition and reduce costs in the debit card market.
DNDCs, also called ‘co-badged’ or ‘multi-network’ cards, have access to two debit payment networks
on the one card. In Australia, DNDCs typically have access to the domestic debit network – eftpos –
and one of the international debit networks such as Visa or Mastercard. In Australia, 85 per cent of
debit cards are DNDCs, with the remainder being single network debit cards. DNDCs give consumers
the ability to make transactions on either network where it is available. For instance, a consumer
travelling overseas could use the international network on their card, while in Australia they could
use either the eftpos network or the international network. The Reserve Bank supports the issuance
of DNDCs to provide effective competition between networks, which can put downward pressure on
fees for merchants and consumers.
There are three main ways the network on a DNDC can be chosen to make a payment. First, a
default network can be set by the issuer of the card, and this might be influenced by rules set by
the card schemes. For example, for contactless payments, DNDCs are currently set to default to the
international network. Second, the merchant could have least-cost routing (LCR) enabled. This lets
merchants choose to override the default network for contactless payments. Merchants may want
to choose the network because one network on a DNDC could be cheaper for the merchant to accept
30
than the other. Third, the consumer could choose the network, for example by inserting the card at
a terminal and selecting from an on-screen option. Consumers may have a range of reasons for
wanting to choose the network, including to avoid or reduce a surcharge (which can vary by
network).
In recent years, the Reserve Bank has encouraged the rollout of LCR. This functionality gives
merchants the ability to set up rules ahead of time to choose the lowest-cost payment network for
a particular contactless or online payment made using a DNDC. LCR can lower merchants’ payment
costs and encourages competition in the debit card market. But it means that consumers may not
know which network on their card will be used to make a payment. By gauging consumer awareness
of DNDCs the Reserve Bank can understand more about the costs and benefits of providing
consumer choice and the factors driving consumers’ choices.
In the 2022 CPS, the Reserve Bank asked five questions about DNDCs: one in the pre-diary and four
in the post-diary questionnaire. The original survey questions are more detailed than the
paraphrased questions and responses used in the material below. The full questions did not assume
much knowledge of the debit card market nor use the terminology ‘dual network debit card’, see
Appendix A.3 for the full wording of questions.
The first question gauged consumers’ knowledge of whether they had a DNDC. Before a consumer
can choose the network on their DNDC they must first know they own a debit card with more than
one network. This question was only given to the 93 per cent of consumers who owned a debit card.
The first question was specifically worded to get consumers to answer using their existing
knowledge, not to get them to check their cards or investigate further. Just over 40 per cent of
consumers said they knew that they had a DNDC, just under 40 per cent were unsure, and the
remainder said they did not have a DNDC (Figure 27).
The large share of consumers that were not sure that they had a DNDC highlights the lack of general
consumer knowledge of DNDCs. This could partly reflect the rise of contactless payments, where
DNDC payments are routed without consumers making an active choice, resulting in less consumer
engagement with their options. Consumer awareness of the second network on DNDCs may also be
inhibited by the front of the card typically just showing the international network’s logo, with the
eftpos logo displayed on the back of the card.
While just over 40 per cent of consumers said they knew that they had a DNDC, this could overstate
consumer awareness for a few reasons. First, the question came after consumers were asked
whether they had a debit or credit card and what specific cards they owned; some consumers may
have inadvertently checked their cards when answering those questions. Second, while consumers
were asked not to check their debit cards to see if they had a DNDC, some may have intentionally
done so anyway. Third, respondents to the survey may be more engaged with payments than the
average consumer, since they agreed to complete a payments survey. Working in the other direction,
some consumers may have been confused by the terminology used in the survey and may have
been aware of the type of debit card they owned.
31
Figure 27: Do You Know if You Have a DNDC?

Note: Share of respondents with at least one debit card answering the question ‘Off the top of your head, do you know if you have
a debit card that can process payments through more than one network?’.
To assess the actual rate of DNDC ownership, in the post-diary questionnaire consumers were given
specific instructions on how to check their cards. After being presented with these instructions, just
under 90 per cent of consumers reported having a DNDC (Figure 28). This is close to the system-
wide average of 85 per cent of Australian debit cards being dual network, and suggests that
consumers were able to accurately determine if their cards were dual network. Comparing the results
of the pre-diary with the post-diary questions shows that there were often significant differences in
consumers’ answers to the two questions. For instance, over three-quarters of those that initially
said they did not have a DNDC, said after inspecting their cards that they did have a DNDC. In total,
just over 55 per cent of consumers were either initially unsure or incorrect about whether they had
a DNDC. This again highlights consumers’ general lack of knowledge about DNDCs.
32
Figure 28: Check Your Debit Card, Do You Have a DNDC?

Share of respondents by category, 2022
Note: Share of respondents with at least one debit card answering the question ‘Check your debit card(s), do you have a debit card
that has both the logo of one of the international networks on the front and the eftpos logo on the back?’.
To gauge consumers’ desire to choose the network on their DNDC, they were then asked whether
it mattered to them which network on their card processed their transactions. Most consumers
reported that it did not matter to them which network on their card processed their transactions,
with just under one-fifth of consumers reporting it did matter (Figure 29). The high share of
consumers that said it did not matter to them may reflect an assessment that there are limited
benefits to gain from choosing one network over another or a lack of awareness of the differences.
In general, benefits or rewards for using a specific debit network are rare, although some merchants
may charge a lower surcharge for some networks, and some networks may have stronger
protections or better refund/chargeback processes.
33
Figure 29: Does It Matter Which Debit Card Network Processes Your Transaction?
Note: Share of respondents with at least one dual network debit card answering the question ‘Thinking about your ATM/debit card(s)
that has more than one network, does it matter to you which network on your card(s) processes your transactions?’.
Consumers were then asked whether they favoured a particular network. Among the one-fifth of
debit card owners that had a preference, broadly similar shares preferred eftpos, Visa and
Mastercard (Table 5). While eftpos was the single most chosen network, consumers do not get to
choose between all three networks at the same time; instead they choose between eftpos and Visa,
or between eftpos and Mastercard. As a group, the international schemes were more favoured by
consumers than eftpos.
Finally, to assess influences that would drive consumers to choose one network over another, they
were asked to choose the factors that guided their choice of network. The main reasons stated for
preferring one network over another were the perceived safety/security of a transaction, surcharges,
merchant acceptance and speed of transaction (Table 5). Few consumers reported choosing debit
networks based on reward points or additional warranties.
Overall, these results suggest that consumers have low awareness of DNDCs and showed that only
a small share of consumers cared which network processed their debit transactions.
34
Table 5: Dual Network Debit Cards

Preferences among DNDC holders, 2022
All DNDC holders DNDC holders that have
(%) a preferred network
(%)
Does not matter which network processes transactions 82 na
Have a preferred network 18 100
eftpos 7 39
Visa 5 30
Mastercard 5 27
Other 1 4
Factors that influence preferred network(a)
Safety/security of the transaction 11 59
Surcharges for making the payment 8 46
Greater acceptance by merchants 8 42
Transaction speed 6 35
Better fraud/chargeback protections 6 32
Reward points 4 21
Additional warranty and/or insurance 2 10
Other 0 2
Note: (a) Factors do not sum to above totals because consumers could pick more than one factor.
6. Online and Automatic Payments
6.1 Online
Online payments made up a higher share of retail payments in 2022 than in 2019, with consumers
shifting away from in-person transactions. When measured by the number of transactions, the share
of payments made online was 18 per cent – up from 13 per cent in 2019 and just 4 per cent in 2007
(Table 6). This reflects the long-term rise in e-commerce, spurred on more recently by lockdowns
and social distancing during the pandemic.
Around two-thirds of respondents made at least one online payment in 2022, up from around 55 per
cent in 2019 and more than double the share of people surveyed in 2007. Some goods or services
are more difficult or more expensive to purchase online – including petrol, supermarket items and
food retail – and so only a small share of these purchases are made online (Figure 30). For other
types of services – such as leisure, bills and holidays – a high share of purchases are made online.
More than half of leisure purchases – such as music, movies and sports tickets – were made online
in 2022.
35
Table 6: Online Payments

2007 2010 2013 2016 2019 2022
Online payments as a share of consumer payments(a)
Number 4 7 13 13 13 18
Value 13 26 36 39 35 40
Mobile/app as a share of online payments(b) na na 6 20 40 37
Online and automatic payments as a share of total spending(c)
Number na na 16 19 21 29
Value na na 44 48 49 60
Notes: Numbers published in Caddy et al (2020) differ because of data cleaning approach.
(a) Excludes payments over $9 999, transfers (payments to family and friends), transport cards and automatic payments.
(b) ‘Mobile phone’ was recorded as a separate category of online payments only in 2013 and 2016, while in 2019 and 2022
this was recorded as ‘App’.
(c) Includes automatic payments, but excludes payments over $9,999 and transfers (payments to family and friends).
Figure 30: Online Payments by Sector

Share of number of payments made online
Consumers are increasingly using their debit cards to make online payments, in addition to BPAY
and bank transfers which have historically accounted for the largest share of online payments. In
2022, the share of online payments made using mobile apps was little changed from 2019 at just
under 40 per cent, with the remainder initiated through other means such as web browsers
(e.g. Chrome or Safari).
36
The figures for online payments as a share of consumer payments shown in Table 6 do not include
participants’ automatic payment arrangements (e.g. direct debits), which are recorded separately in
a post-diary questionnaire (see Section 6.2 below). When these automatic payment arrangements
are included in total spending, the share of total weekly spending accounted for by automatic and
online payments has increased by 11 percentage points since 2019 (Table 6).
Online payments continue to be made most frequently by younger respondents. Three-quarters of

people aged under 40 made at least one online payment during the 2022 diary week (Figure 31, top
panel). The online payment users in this age group made nearly one-third of their weekly purchases
online on average, more than half of the time via mobile apps (Figure 31, bottom panel). When
respondents in older age groups made online purchases, they tended to use apps less frequently.
Figure 31: Online Payments by Age

2022
Note: (a) Share of respondents who made at least one online payment in the diary week.
6.2 Automatic payments
In addition to recording payments that they initiated during the diary week, respondents were asked
details about automatic payments that occurred during the week as part of a post-diary
questionnaire. These automatic payments include pre-authorised direct debit payments for bills
(e.g. rent, phone and utility bills or digital service subscriptions), regular debt repayments (mortgage
or credit card repayments) and recurring ‘pay anyone’ transactions set up via internet banking.
Automatic payment arrangements are becoming more common, with 83 per cent of respondents in
2022 reporting that they had at least one automatic payment arrangement, compared with 65 per
cent in 2016. The share of payments made automatically during the week of the CPS has been
steadily increasing over recent years, to 12 per cent of the total number of transactions (Figure 32,
37
left panel). By value, nearly one-third of weekly spending was made automatically in 2022
(Figure 32, right panel). The growth in automatic payments reflects the changing way people pay
their bills as well as the increasing use of subscription services, such as video streaming and meal
services. Two-thirds of all household bill payments in 2022 were made automatically, which is around
triple the share in 2013. This shift towards automatic payments for certain transactions is another
way in which payments are becoming more convenient for consumers.
Figure 32: Automatic Payments

Share of total transactions
7. Cheques
Just seven personal cheque payments were recorded in the 2022 CPS, accounting for only 0.1 per
cent of the number of payments. This was down from 1.2 per cent of payments in 2007.
As in previous surveys, the use of cheques was heavily concentrated among older Australians. The
share of respondents over 65 that had made a cheque payment in the past year was nearly triple
that of those under 65, at 14 per cent versus 5 per cent. One-quarter of respondents aged 65 and
above owned a cheque book, while less than 2 per cent of respondents under 30 had a cheque book
(Figure 33).
38
Figure 33: Cheque Book Ownership by Age

Just 1 per cent of respondents said they would experience a ‘major inconvenience’ or ‘genuine
hardship’ if shops and businesses stopped accepting cheques for payments. The
Australian Government has outlined plans to wind down the cheque system by 2030
(Australian Government 2023). The results from the 2022 CPS suggest this will only affect a small
share of the population, with this group more likely to be over 65. The widespread increase in card
payments seen in the 2022 survey shows a large share of older consumers have already adapted to
changing payment methods. Nevertheless, the payments industry, including banks, will need to work
with cheque users to help them transition to different payment methods.
8. Other Payment Methods
8.1 Consumer awareness and use
In recent years, several other ways to make payments – besides cash, cards or cheques – have
emerged in Australia. The CPS gathered respondents’ knowledge and usage of a number of these
other ways to make payments. Knowledge and usage of these different payment methods varied
widely among respondents (Figure 34). PayPal, a type of digital wallet, and BNPL had near universal
consumer awareness. In contrast, consumers had little awareness of Beem (a digital wallet with the
ability to split money with friends) and Alipay/WeChat Pay (mobile payment services), and usage in
Australia was also low. Many people were aware of cryptocurrencies, but only a very small share
had used them to make a payment in the past year.
39
Figure 34: Alternative Payment Methods

The 2022 CPS asked respondents for the first time about their awareness of using quick-response
(QR) codes for making payments. Some merchants now offer QR codes that direct consumers to a
mobile wallet, typically funded by the consumer’s debit or credit card, to complete a payment at the
terminal. About one-third of respondents had heard of this payment method and around 10 per cent
reported using it to make a payment in Australia in the past year. In some other countries, merchants
are providing QR codes that allow their customers to pay by transferring funds directly from their
bank account through fast payment systems. Adoption of this payment method in Australia could
provide consumers with an alternative to card payments.
If participants in the CPS had heard of but not used an alternative payment method, they were
asked about their reasons for not using it. Most of these respondents reported that their existing
payment methods met their needs. For example, 50 per cent of people who were aware of BNPL
said their existing methods met their needs; concerns about privacy and/or security and spending
control were other commonly cited reasons for not using BNPL (Figure 35). Those who had not used
cryptocurrency or QR code payments were relatively more likely to cite a lack of knowledge or tools,
as well as concerns about privacy and/or security.
40
Figure 35: Reasons for Not Using Alternative Payment Methods

Share of respondents aware of method but not using it in the previous 12 months, 2022
Note: Bars do not sum to 100 per cent as respondents could choose more than one answer and response of ‘Other reason’ not
shown.
8.2 Cryptocurrency payments
While only just under 2 per cent of respondents had used cryptocurrency to make a payment in the
past year, 11 per cent of consumers reported holding cryptocurrency.15 Males, especially those under
30, were the most likely to hold cryptocurrency (Figure 36). Even among males under 30 that held
cryptocurrency, only a small share had made a payment using cryptocurrency in the past year. The
low share of holders that had made a payment with cryptocurrency may reflect the large transaction
fees for cryptocurrency transactions as well as little merchant acceptance in Australia. In addition,
holders of cryptocurrency may be more driven by a desire for investment returns or hedging against
inflation rather than using it as a payment method (Weber et al 2023).
15 Respondents were instructed to exclude payments made to buy or sell cryptocurrency for investment purposes.
41
Figure 36: Cryptocurrency Holders

Share of respondents by age, 2022
8.3 Buy now, pay later
BNPL services allow customers to purchase goods on credit and make interest-free instalment
repayments. While offering benefits for consumers, BNPL services are typically an expensive way for
merchants to accept payments, costing on average around 4 per cent of the value of the transaction,
compared with an average of around 0.5–1.5 per cent for traditional card payments. Almost one-
third of Australians had used a BNPL service in the past year, up around 8 percentage points from
2019. Usage was highest among younger Australians: over 40 per cent of 18–39 year olds had used
a BNPL service in the past year, compared with only 10 per cent for those aged 65 and over
(Figure 37). Usage increased across all age groups from 2019. While a large share of Australians
had used BNPL in the past year, BNPL payments made up just 0.7 per cent of the number of
payments in 2022 up from 0.5 per cent in 2019.
Credit cards and BNPL services both allow customers to purchase goods on credit, and some
consumers may use BNPL services as a substitute for credit cards. For instance, consumers that use
BNPL are less likely to own a credit card, and this is true across most age groups (Figure 38). This
may partly reflect that consumers who are not eligible for a credit card may use a BNPL service
instead. In contrast to credit card issuers, BNPL services have not typically conducted thorough
assessments of creditworthiness such as checking customers’ incomes, assets and expenses.
42
Figure 37: BNPL Use by Age

Share of respondents in each age category who used BNPL in the previous 12 months
Figure 38: Credit Card Ownership by Age and BNPL Usage

Share of respondents with a credit card by age, 2022

43
For the first time, the 2022 CPS also collected data on the number of BNPL accounts consumers had
with different BNPL providers. On average, Australians had 0.7 BNPL accounts per person, with
people aged 18–39 having nearly one account on average (Figure 39, left panel). Those aged 65
and over were the least likely to hold a BNPL account. Of those consumers with a BNPL account,
BNPL users held two accounts on average (Figure 39, right panel). Consumers with access to multiple
accounts may encourage competition in the BNPL market, as providers compete to entice consumers
to use their service. However, BNPL firms typically do not allow merchants to pass on the high cost
of accepting their service directly to BNPL users through a surcharge. So, the benefits of competition
in the BNPL market may accrue to BNPL users, subsidised by non-users as merchants recoup the
cost by raising the price of goods and services generally.
Figure 39: Average Number of BNPL Accounts Held by Age

2022
8.4 Account-to-account payments, PayID and digital wallets
The way in which people can make account-to-account payments has changed significantly because
of the introduction of new technologies. Since its launch in February 2018, the NPP has allowed
customers of more than 90 financial institutions to make fast data-rich payments 24 hours a day;
over 88 million Australian bank accounts are able to make and/or receive payments through the NPP
(NPP Australia 2022). Separately, mobile apps have been developed to facilitate quick and easy
transfers to friends and family (e.g. Beem) and even provide pocket money.
A significant innovation of the NPP has been the introduction of PayID. It allows account-to-account
bank transfers to be addressed using a mobile number, email address or Australian Business
Number (ABN). In 2022, around half of Australians had heard of PayID and 30 per cent had used it
44
in the past year (Figure 34). PayID is more convenient than using the traditional Bank State Branch
(BSB) and account numbers, which require consumers to correctly key in 15 digits. Another benefit
of PayID is that the payer receives confirmation of the name of the person or business being paid,
reducing the risk of fraud. PayID was introduced in 2018 as part of the NPP. Consumer uptake of
PayID has been slower than initially expected, and currently not all Australian bank accounts are
connected to make or receive a payment using PayID (Connolly 2022). In the diary, payments using
PayID made up around 10 per cent of bank transfers, with the remainder addressed using BSB and
account numbers (Figure 40). Consumers under the age of 50 had the highest share of bank
transfers addressed using PayID.
Figure 40: Bank Transfers by Age

Share of number by address method, 2022
Note: Excludes transfers to family and friends, and transfers within own accounts.
Among consumers that had heard of PayID but not used it in the past year, most felt that their
existing payment methods met their needs (Figure 41). Some respondents also didn’t know how to
use or didn’t have the necessary tools to use PayID. This could reflect that some institutions have
not yet rolled out PayID. Among institutions that had rolled out PayID, many do not advertise the
benefits to their customers or give much guidance on how to use PayID.
45
Figure 41: Reasons for Not Using PayID

Share of respondents aware of method but not using it in the previous 12 months, 2022
New payment technologies have also facilitated a shift to transferring money to family and friends
electronically using mobile apps rather than providing cash. The overall number of peer-to-peer
transfers has been steady at around 2 per cent of consumer payments since 2013. The share of
these transfers made using mobile and app-based methods has been steadily rising and accounted
for over half of transfers in 2022 (Figure 42).16 The increase in the use of mobile technology for
transfers has been led by younger age groups, with respondents aged under 30 making three-
quarters of their peer-to-peer transfers using apps.
16 The definition of an app-based payment has changed over survey years. In 2019 and 2022, the CPS asked whether
consumers made a payment online or through an app. In 2016 and 2013, consumers were asked if a payment was
made online by a smartphone/SMS payment.
46
Figure 42: Person-to-person Payments by Channel

Share of number of person-to-person payments
8.5 Transport cards
Since the 2019 survey, the CPS has collected information on the use of pre-paid transport cards
such as Myki and Opal.17 These types of cards have been rolled out across many public transport
systems in Australia. More recently some public transport terminals have enabled fares to be paid
directly by tapping a debit or credit card or mobile device on the terminal rather than a specific
transport card. In the interest of ensuring comparability with previous survey waves, the analysis in
the preceding sections does not include payments made with transport cards. In 2022, these
payments were equivalent to 0.7 per cent of the number of consumer payments, down from 2 per
cent in 2019. Besides increased use of payment cards and mobile devices directly on public transport
terminals, the decline in transport card use may have been caused by increased working from home
following the pandemic. For instance, usage of public transport in Australia was below pre-pandemic
levels in 2022 (see Nicholas (2023) or Roy Morgan (2023)).
17 Survey waves prior to 2019 captured ‘top-ups’ of transport cards, rather than when the card was used for an individual
trip; since 2019, the CPS captures both top-ups and individual transport card use.

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Research Discussion Paper

The Evolution of Consumer Payments

Figures in this publication were generated using Mathematica.

ISSN 1448-5109 (Online)

Tanya Livermore*, Jack Mulqueeney*, Thuong Nguyen** and Benjamin Watson**

Research Discussion Paper

*Note Issue Department

Authors: livermoret, mulqueeneyj, nguyenth and watsonb at domain rba.gov.au

External Communications: [email protected]

JEL Classification Numbers: D12, D14, E42

3. Key Trends in Consumer Payments 2

6. Online and Automatic Payments 34

8. Other Payment Methods 38

Appendix A: Survey Methodology 47

Copyright and Disclaimer Notice 55

• the payment location – whether in-person or online

3. Key Trends in Consumer Payments

Figure 1: Cash and Card Payments

Table 1: Consumer Payment Methods

Figure 2: Use of One Payment Method Only

Figure 3: Influence on In-person Payment Method Choice

Figure 4: Merchant Payments Acceptance

Source: RBA calculations, based on data from Ipsos.

Figure 5: Trends in Card and Cash Payments

4.1 Cash payments

Figure 6: Cash Payments

Figure 7: Cash Payments by Transaction Size

Figure 8: In-person Cash Use

Note: (a) Age-adjusted income quartiles.

4.2 Cash users and their attitudes towards cash

Figure 9: Cash Use Intensity

Figure 10: Effects of No Cash

Figure 11: Why Do You Need to Use Cash?

Figure 12: Has Internet-compatible Mobile Phone

4.3 Cash holdings

Figure 13: Wallet Cash Holdings

4.4 Cash access

Table 2: Cash Top-ups

Share of respondents making one 86 72 76 45 48 29

Figure 14: Most Preferred Cash Access Point

Figure 15: Access to Cash Services

Figure 16: Inconvenience of Cash Services

5.1 Card use

Figure 17: Card Payments

Table 3: Card Payments for Different Types of Purchases

5.2 Credit and debit cards

Figure 18: Debit and Credit Card Payments

Figure 20: Debit Card Use by Age

Source: RBA calculations, based on data from Ipsos.

5.3 Contactless and mobile card payments

Figure 21: Card Payments by Channel

greater awareness of this payment method, as well as widespread merchant acceptance of

Figure 22: In-person Payments

Figure 23: Mobile Device Use by Age

Figure 24: Use of Mobile Wallets by Age

Figure 25: Contactless Card Payments

5.4 Surcharging of card transactions

Table 4: Card Surcharges Paid

Figure 26: Response to Potential Payment Surcharge

5.5 Dual network debit cards

Tanya Livermore, Jack Mulqueeney, Thuong Nguyen and Benjamin Watson