Australia could do away with bank cards within seven years and rely solely on mobile wallets if their current trend of growth continues, according to new estimates compiled by Money.com.au.
Reserve Bank of Australia (RBA) data shows the share of mobile wallet transactions rose from 11% to 35% in just three years from 2020 to 2023. Projections indicate that at this rate, mobile wallets could account for all retail card payments by 2032 at the earliest.
Money.com.au’s research and data expert, Peter Drennan, says Australians are embracing mobile wallets at an unprecedented rate.
“We’re seeing a glimpse into a future where your phone is your entire wallet and all transactions are made via a mobile phone, smartwatch or other device,” he said.
“Unlike physical cards, which can be forgotten, lost, or stolen, e-wallets provide a more convenient alternative for everyday payments.”
Strong use growth
Over the same three-year period, debit card use grew by 11%. In comparison, mobile wallet usage surged by a staggering 475%, growing roughly 43 times faster. The number of transactions made using physical cards increased from 563 million to 625 million, while mobile wallet transactions jumped from 70 million to 400 million.
Money.com.au’s finance expert, Sean Callery, says there’s a growing preference for mobile wallets, even as overall debit card transactions continue to rise.
“Mobile wallets aren’t just about convenience anymore, they’re quickly becoming the go-to way to pay,” he said. “Plus, with features like biometric authentication, they give people a real sense of control and safety, which is so important with data theft being such a constant worry.”
Spend trends
There’s a noticeable difference in the size of transactions made via mobile wallets and physical cards. The average transaction value for mobile wallets currently stands at $40, significantly lower than the $84 average for non-mobile wallet transactions.
Mr Drennan says this discrepancy may hinder broader adoption, as consumers still use physical cards for transactions at smaller merchants, for large purchases or financing, and for booking travel or accommodation where a card is needed for verification.
“Younger generations are more inclined to set up e-wallets and use them for small transactions, which likely results in a smaller average spend. I’d also assume that people still tend to reach for a physical card when making larger transactions,” he said.