Australia is increasingly becoming a cashless society with debit card usage doubling more than credit cards, indicating consumers prefer to shop with their own money, new figures reveal.
Reserve Bank of Australia shows that debit card usage increased by 15 per cent in the first quarter of 2012 to almost 700 million transactions.
This compares with only 7 per cent growth for credit card use, to 430 million transactions, over the same period.
Tyro Payments CEO Jost Stollmann said the trend away from unsustainable spending habits of the past was likely to accelerate.
“Ten years ago, many consumers were using credit cards as though they’d never have to pay them back,” he said.
“Now because consumers have been startled by the global financial crisis, many feel insecure and prefer the more conservative approach of using their own money, knowing they are debt free.
“Card payments are becoming ever easier to use. With Tap & Go consumers simply pay by tapping their card against a machine at the checkout. Visa and MasterCard allow consumers to spend up to $35 without the use of a signature or pin.
“As card payments become as fast and more convenient than cash, they displace cash and check payments.”
But Stollmann warned that as Australians become more dependent on electronic payments, the banking industry has to dramatically lift resilience and security standards for the entire retail payment systems.
“Banks’ payment systems have failed nine times since August 2010, leaving consumers and retailers unable to transact. Consumers and retailers bear the consequences from years of underinvestment,” he said.
“The move to a cashless society and new mobile technologies will result in dramatically increased number of transactions, putting further stress on the failing legacy core payment systems of Australia’s banks.”