The analysts over at IBISWorld predict that contactless payment methods will all but replace traditional physical credit and debit card payments by 2020 particularly for transactions under $100.
“Grandpa, what’s this plastic credit card you speak of?”
Overall, PIN-only and contactless credit card and debit card purchases are likely to continue their assault on cheque and cash options, after posting annualised transaction growth of 6.6 per cent and 14.2 per cent respectively over the four years through 2013-14.
Electronic payments are leaving cheques in the dust
“The prospects for credit cards and debit cards are rosy, although contactless payments are taking over from traditional PIN transactions for purchases of less than $100,” IBISWorld Australia General Manager Dan Ruthven remarked.
“With the increase in online shopping, credit and debit transactions will continue to dominate the payments system for personal use and carve an increasing piece out of ATM withdrawals, despite holes in the wall being in more locations than ever before,” he added.
“The way Australians pay has been changing for some time,” Ruthven explained, “For generation X and the baby boomers, a chequebook is fondly remembered as the most popular of payment options.”
“As more retail outlets, personal banking services and corporate purchases have moved to electronic payment methods, cheques have faced certain demise.”
“In the coming years, contactless payments and paying using a mobile phone will begin to replace the standardised plastic cards we have widely used since the 1980s.”
In 2013-14, the average value of a cheque totalled $4,045 – higher than it has ever been at any point in history. This is because fewer people are using cheques for small and medium purchases, but still prefer them for the transactions with lots of zeros and comas.