Rising steadily over several years, the card market slowed in 2020 as a result of the pandemic, which saw both consumer and commercial spending drop. 

But as consumers come to terms with the new normal, the card market is expected to rebound, with a forecasted rise of 8.3 per cent.

According to GlobalData’s Payment Cards Analytics, the value of card payments registered growth of just 0.8 per cent in 2020, significantly less than the  5.8 rise seen the previous year.  

As economic conditions improve, and Australia’s vaccination program gathers pace, the card payments market is forecast to reach $749bn in 2021.

Senior Payments Analyst Sowmya Kulkarn said Australia’s developed card payment market and strong payment infrastructure, was a result of its consumer preference for electronic payments. 

“Australians are prolific users of payment cards, with high frequency of card payments at 185 times per card in 2020,” she said. 

The growth in card payments will be propelled by the growing use of contactless cards and online shopping, with consumer habits changing as a result of COVID restrictions.

Hygiene concerns have seen an increasing number of brick and mortar shops, including smaller merchants, insisting on non-cash and contactless payments, with the limit for contactless card payments increasing from $100 to $200 last year.  

The past year has also seen an increase in the use of mobile wallets, with the Commonwealth Bank reporting more than 40 per cent of its debit and credit card contactless transactions being made via smartphones. 

An increase in online shopping as a result of stay-at-home orders will also contribute to the growing use of credit cards, being one of just a few tools used for e-commerce payments. 

Debit cards are the most preferred card type for payments, though, with the percentage share of credit and charge cards segment declining over the past few years. 

The drop in credit card usage is attributed to changing consumer attitudes towards debt, and the growing popularity of buy now pay later options.