Australia: 2025 analysis of payments and ecommerce trends

Originally published in The Paypers on March 6, 2025 and reposted here with permission. Read the original article here.

Australia’s payments landscape in 2025 continues to evolve rapidly. In addition to primary drivers like technological innovation, shifting consumer expectations, and regulatory changes, the payment ecosystem is shaped by the increasing adoption of digital wallets, the proliferation of ecommerce, government initiatives promoting digital payments, and the expansion of real-time payments infrastructure.

According to a Mordor Intelligence report, Australia’s payments market size is valued at USD 1.07 trillion in 2025 and is projected to reach USD 2.29 trillion by 2030, at a  CAGR of 16.44%. This growth is driven by high internet penetration (96% per a report by neobank Volt) and widespread smartphone usage, which have fostered the adoption of digital payment methods nationwide.

The transition from cash to digital payments is ramping up, with less than 13% of retail transactions paid by cash, according to June 2023 data from the Reserve Bank of Australia (RBA). In addition, fresh data from December 2024 showed that for October, 44% of device-present transactions acquired in Australia were made by mobile wallets such as Apple Pay, Google Pay, and Samsung Pay, 54% by contactless cards, while the remaining 2% were card-insert transactions.

One of the most significant trends is the continued growth of the New Payments Platform (NPP), which enables instant, data-rich transactions. According to Fintech Australia, the platform drove AUD 3.6 billion in net benefits for small merchants in 2024, with roughly 33% reporting revenue growth after adopting account-to-account (A2A) payment solutions.

The Buy Now, Pay Later (BNPL) sector remains particularly fruitful, prompting AUD 3.3 billion in net benefits to small merchants – 84% of those who adopted the method reported revenue growth.  According to Red Search estimates, BNPL in Australia is projected to expand rapidly, at a CAGR of 9.5% by 2029. However, specialists think growth may be stymied after the Australian government passed legislation at the end of 2024 to regulate BNPL under the National Consumer Credit Protection Act 2009.

Cryptocurrencies and central bank digital currencies (CBDCs) have also seen growing interest, with RBA exploring the potential role of a digital AUD. Moreover, fintechs are entering cross-border payments. These providers offer significantly lower rates than traditional banks, enabling small merchants to generate AUD 3.5 billion in net benefits from cross-border payment solutions in 2024.

Australia’s paytech innovation and trends

Australian financial institutions and fintech companies are actively developing new payment technologies to enhance security, efficiency, and customer experience. Key innovations include biometric authentication, AI-driven fraud detection, and blockchain-based payment systems. Open Banking regulations (through the Australian Government’s Consumer Data Right legislation) have facilitated the rise of Embedded Finance, where payments are seamlessly integrated into non-financial platforms.

The payments sector remains the most mature fintech segment, with over 150 active firms headquartered in Australia, accounting for roughly 20% of the fintech landscape, according to KPMG estimates. Major firms such as Tyro, Cuscal, Zip, and Airwallex continue to lead the space, benefiting from local and overseas investments.

Australia’s fintech sector is at the forefront of payment innovations, with developments in the following areas:

Real-time payments (RTPs)

PayTo, PayID, and the NPP (developed by Australian Payments Plus) are emerging as significant trends in Australia’s payment landscape in 2025, reshaping how businesses and consumers transact. Here is an overview of their current status and future outlook.

A2A Payments

Pay by Bank is a separate payment solution developed by various providers like Azupay and NAB, enabling RTPs directly from a user’s bank account without using cards. It integrates with PayID and PayTo for streamlined transactions but operates as an independent payment method rather than an NPP overlay service. Pay by Bank is a payment method that allows customers to make online purchases directly from their bank accounts without requiring a credit or debit card. Pay by Bank or A2A payments are predicted to become mainstream by 2025. This trend, already familiar in Europe, is expected to gain traction in Australia, particularly for bill payments. Providers will focus on educating consumers about the ease and security of this payment method:

• Customers can make payments without needing to top up wallets or type in card details;
• Pay by Bank methods have lower transaction fees than credit card payments; 
• Pay by Bank is a secure way to transfer money between bank accounts.

Surcharging changes 

A ban on surcharging for debit card transactions is predicted and will impact the payment landscape, although it may be delayed until 2026. However, the impact may be limited due to:

• The Reserve Bank of Australia’s lack of power to limit interchange fees;
• The lack of visibility on card scheme fees;
• The exclusion of credit cards from the ban.

Increased adoption and usage of QRs

QR code payments are gaining momentum in Australia, with adoption rates rising rapidly. Over 70% of Australian businesses have implemented QR codes in some capacity, and approximately 65% of Australians scanned a QR code in April 2024. QR codes are being integrated with Australia’s RTP infrastructure:

Blockchain and AI

These technologies are being integrated to enhance fraud detection, streamline cross-border payments, and improve customer experiences:

Main players in the payments ecosystem

The Australian payments ecosystem comprises traditional banks, fintech disruptors, and global payment giants. Major players include:

Popular payment methods and solution providers

Australia’s payment ecosystem offers a wide range of methods catering to diverse consumer preferences. As mentioned, in 2025 digital wallets will become the preferred payment method. BNPL and direct A2A transfers follow closely behind.

Key payment solution providers include:

Ecommerce and marketplaces

The Australian ecommerce market has expanded significantly, with a surge in online shopping post-pandemic and continued demand for seamless digital experiences. 

Australia is the 14th largest ecommerce market in the world, according to ECDB data. It’s ahead of emerging countries such as Brazil, which has a population seven times bigger, and developed markets such as Italy, whose population is three times bigger. With a predicted revenue of USD 50,720 million by 2025, the sector revenue is projected to grow at an 8.2% CAGR, reaching USD 69,536 million by 2029.

The country ranks as one of the leading ecommerce markets globally, with a highly developed digital economy and a strong preference for online shopping. According to PCMI proprietary data and analysis, in 2023, Australia’s total ecommerce market reached USD 81.13 billion, reflecting deep integration into consumer lifestyles and a steady shift toward digital transactions.

Domestic ecommerce dominates the Australian market, accounting for 85.8% (USD 69.65 billion) of total sales, while cross-border ecommerce answers for 14.1% (USD 11.47 billion). Although domestic players continue to hold strong market positions, cross-border transactions are growing, fuelled by better exchange rates, improved international logistics, and consumer demand for diverse product offerings.

Key ecommerce payment methods in 2023 were distributed as follows:

• Internationally-enabled credit cards: 36.7%
• Debit cards: 25.0%
• BNPL: 13.0%
• Bank transfers: 12.0%
• Digital wallets: 11.2%
• Other (including gift cards, pay-on-delivery, and miscellaneous methods): 2.0%.

Preferred devices

Unlike some other markets where mobile commerce dominates, Australia maintains a more balanced ecommerce ecosystem. In 2023, desktop transactions made up 55% of total ecommerce sales (USD 44.62 billion), compared to 45% via mobile devices (USD 36.51 billion). This suggests that while mobile shopping is growing, many consumers still prefer desktop-based transactions for larger purchases and more complex online shopping experiences.

Key ecommerce verticals

The leading ecommerce categories in Australia by market share include:

• Retail: 51.7% (USD 41.94 billion)
• Travel: 15.9% (USD 12.94 billion)
• Streaming services: 9.7% (USD 7.88 billion)
• Ride-hailing and delivery apps: 9.3% (USD 7.58 billion)
• Software-as-a-Service (SaaS): 8.9% (USD 7.25 billion)
• Gaming: 2.6% (USD 2.14 billion).

This breakdown highlights the significant role of retail and travel in Australia’s ecommerce ecosystem, along with the rapid rise of digital services, including streaming and SaaS platforms.

Main ecommerce players

Australia’s leading ecommerce players include:

Global marketplaces

Local marketplaces and retailers

Other noteworthy platforms

Cross-border developments

Cross-border ecommerce is booming in Australia, with consumers increasingly purchasing from international retailers due to competitive pricing and product variety. Asia-Pacific and North American brands continue to be the most popular among Australian shoppers.

Cross-border ecommerce spending is projected to reach USD 7.9 trillion globally by 2030 per Airwallex data, with Australia playing a significant role in this expansion. Australian merchants accounted for more than 25% of total ecommerce transactions. This figure is expected to grow as more businesses target global markets.

Also according to Airwallex, 54% of global consumers plan to increase their international online spending in 2025, reinforcing Australia’s position as a key market for cross-border trade. Popular regions for Australian shoppers include Asia-Pacific (China, Japan, and South Korea – with Chinese platforms like Alibaba and Shein gaining traction) and North America. Presenting prices in local currencies is critical, as 93% of consumers say currency confusion impacts their decision to complete purchases

The rise of cross-border payments has led to enhanced foreign exchange solutions and more competitive international transfer fees. Fintechs such as Wise and Airwallex are revolutionising the way Australians send and receive international payments, making transactions faster and more cost-effective. Wise’s platform has expanded into business-to-business (B2B) markets, partnering with Australian institutions such as Bendigo Bank to streamline international payments. The high fees charged by traditional banks have pushed merchants to switch to fintech solutions.

It must be noted that the RBA is exploring linking its NPP with fast payment systems in other countries, enabling real-time international transfers and fostering global trade partnerships.

Australia’s trade relationships with China, the US, and Europe remain crucial, with logistics companies investing in infrastructure to streamline cross-border shipping and reduce delivery times. Additionally, regulatory changes around data security and anti-money laundering measures have increased scrutiny of international transactions.

Regulatory initiatives

The Australian government and regulatory bodies continue to implement policies that shape the payments and ecommerce sectors. As of February 2025, the RBA is actively engaged in several regulatory initiatives poised to influence Australia’s financial landscape. Among the most relevant are the following:

Australia’s upcoming payments and ecommerce trends

Australia’s payments and ecommerce landscape in 2025 is marked by rapid digital developments, regulatory evolution, and increased consumer reliance on innovative financial technologies. The transition from cash to digital transactions continues to accelerate, driven by the widespread adoption of mobile wallets, RTPs, and A2A transfers. Ecommerce remains a dominant force in the economy, with robust domestic sales complemented by growing cross-border transactions. Regulatory initiatives, including BNPL reforms, surcharging changes, and CDR expansion, signal a shift toward greater consumer protection and market transparency. As fintechs and traditional financial institutions adapt to these changes, Australia is poised to remain a leader in digital payments and ecommerce innovation, ensuring a secure, efficient, and competitive financial ecosystem.