How do we pay? Credit cards, PayID and Osko, says RBA

The latest round of RBA payments data has revealed new trends in consumer spending, with ATM use dropping and Paypal use increasing.

Here are the numbers:

Among the biggest losers in the last year, ATM withdrawals have seen a large decrease over the last 12 months. Although September saw a slight increase of 4% in transactions, ATM withdrawals still saw a 21.4% regression in the preceding year. The value of ATM withdrawals also saw a 16.9% decrease. 

Meanwhile the number of total purchases on Australian-issued cards has remained quite steady, according to the RBA. The 932.8 million transactions across both debit and credit cards in the month of September 2021 was a 0.3% increase on the prior month, and just a growth of 0.01% in the prior 12 months. 

Of those transactions, credit and charge cards saw the biggest decrease in transactions, falling 2.4% in the 12 months to September 2021, although the value of those transactions actually grew by 2% on the prior year. Debit cards too saw an increase in spending, with a 1% yearly growth in transactions leading to a 6% growth in transaction value. 

The number of transactions perhaps is more helpful is showing the popularity of these spending methods, whereas the value of purchases is hard to unpack.

New Payment Platform transactions (NPPs), which refers to payments making use of the services PayID and Osko, have seen a large increase in total transactions and their value in the last year. The 84 million transactions using NPPs in September was actually a fall of 0.4% from the prior month, but contributed to a 63.4% growth in the prior 12 months. 

The $90.6 billion that NPP transactions accounted for in the month of September equated to a 2.8% fall on the prior month, although the value of NPP transactions saw a growth of 83.4% in the last year.

Paypal and buy now pay later

In other alternatives, the latest Roy Morgan payments data found that Aussies were using Paypal a record amount during the COVID-19 pandemic. Over 47% of Australians had used Paypal within the last 12 months, reversing a trend of users leaving the service for other alternatives such as Buy Now Pay Later (BNPL). 

The Roy Morgan data also found that more than 78% of Aussies are now aware of BNPL services, although only 3.5 million Australians (16.6%) had used one within the last 12 months. 

There is still a lot of belief in the future of BNPL services, with Silicon Valley tech giant Square entering a $39 billion agreement to purchase industry-leader Afterpay, as an example. And, a number of Aussie banks have begun launching their own 0% interest credit cards in order to compete with BNPL services as the number of transactions on traditional cards fall.

Want to learn more about the future of payments? Check out our piece on the future of credit cards to see how consumer trends are shifting.

Head over to our credit card hub to compare cards, or head to our buy now pay later hub for everything BNPL.