Alternative payment methods such as digital wallets are set to account for 34.1% of all eCommerce sales, research firm GlobalData revealed.
The prediction comes amid sustained growth in eCommerce over the last few years, supported by growing availability of secure online payment tools, increasing number of online shoppers, and the proliferation of online merchants.
GlobalData said Australia's eCommerce market is expected to register a 10.3% growth in 2023 to reach $74.9 billion, noting consumers are increasingly shifting from offline to online purchases.
The market is set to increase at a compound annual growth rate (CAGR) of 7.5% between 2023 and 2027 to reach $99.8 billion.
GlobalData senior analyst in banking and payments Shivani Gupta said the popularity of online shopping events such as Black Friday and Cyber Monday has also driven eCommerce growth in the country.
“eCommerce payments in Australia are dominated by payment cards, accounting for a 50.6% share in e-commerce payment value in 2023,” Gupta said. “Of this, credit and charge cards account for 29.2% share while debit cards account for 20.9%, according to the GlobalData’s 2023 Financial Services Consumer Survey.”
Consumers prefer credit and charge cards due to the value-added benefits they offer, GlobalData reported. These benefits can include interest free instalment payment options, reward programs, cashback, and discounts.
“Payment cards are followed by alternative payment tools, which collectively account for a 34.1% share in 2023,” Gupta said. “Alternative payments are increasingly preferred by Australians with some of the popular brands being PayPal and Apple Pay.”
The growth of alternative payments has also been driven by a rising popularity in buy now, pay later (BNPL) companies, with some launching their own shopping events.
“The growing popularity of alternative payment solutions, especially among younger generation, is expected to further accelerate the shift away from cards and these alternative payments are therefore all set to challenge the dominance of payment cards over the next five years,” Gupta said.
GlobalData’s 2023 Financial Services Consumer Survey was carried out in Q2 2023. Approximately 50,000 respondents aged 18+ were surveyed across 40 countries.