According to a recent research report, Australian consumers are turning away from making purchases on credit cards. A strong increase in debit card usage has made it the preferred payment method for consumers.
According to East & Partners, Australia’s leading banking research and advisory firm, the use of debit cards grew substantially in 2009. The findings were taken from the company’s latest Merchant Acquiring and Cards Market research program, which is based on direct interviews with 2,276 Australian merchants.
According to the results, debit card payments grew from 24.6 per cent of all transactions to 35.8 per cent. Robert Morgan, head of market analysis at East & Partners, said that the dominance of credit cards has now subsided.
“The era of credit cards taking up the biggest share of merchant receivables has clearly come to an end. Our research shows that debit cards are now the biggest source of merchant receipts,” he said.
“Debit card receivables have been growing consistently for the past several years while credit card growth has been relatively slower. Deleveraging and risk aversion, which followed in the wake of the global financial crisis, merely accentuated these trends.”
According to Morgan, the fact that consumers are transitioning to debit card payments is moving Australia in line with the trend in other developed countries.
“These developments have now moved Australia in line with many developed countries, like the United Kingdom and the United States, where debit cards are a dominant payment method,” he said.