RDP 2014-05: The Changing Way We Pay: Trends in Consumer Payments 3. Changing Payment Behaviour

In 2013, respondents reported making an average of 13.0 payments during the week of the study, with a total value of expenditure of around $900 (Table 1). These results are broadly consistent with the results of the previous two surveys; although the number of payments per week and the total value of expenditure recorded in diaries has fluctuated, these movements should not be interpreted too literally because changes to the sample, delivery method and survey design have led to some changes in coverage over time. The median and mean payment values increased slightly across surveys as would be expected (Table 1) and the variety of purchases across merchant categories is consistent across years. Further, where a comparison is possible with statistics reported by financial institutions, the number and value of payments recorded in the survey accord reasonably well (see Appendix B).

Table 1: Consumer Payments Recorded
Per respondent per week
2007(a) 2010 2013
Number of payments 12.7 15.6 13.0
Total value of expenditure per person per week ($)(b) 631 915 879
Mean payment value ($)(b) 50 59 67
Median payment value ($) 20 20 23

Notes: Figures may differ slightly from published results of the 2007 and 2010 surveys as this comparison does not adjust for differences in coverage
(a) Number of payments and values of expenditure over the two-week diary divided by two
(b) Payments of $9,999 or more are excluded for comparability across waves because payment value was truncated at $9,999 in the 2007 survey; further, the small number of such payments that occur during any week generates significant volatility in the average over time

Sources: Colmar Brunton; Roy Morgan Research

Table 1 includes all consumer payments recorded in the diary. The 2013 survey also collected information about transfers of funds to family and friends and between the respondent's own financial accounts (for example, to repay debt or manage finances). While transfers are far less frequent than consumer payments (respondents reported on average 0.5 transfers per person per week), transfers are on average noticeably larger than consumer payments, so the average total value of transfers equates to around 24 per cent of the value of consumer payments (Table 2). Transfers are of interest because they account for a high proportion of mobile payments and are a focus of innovation in the payments industry in Australia. Unless specified, the tables and figures in the remainder of the paper include only consumer payments as these can be compared across the three surveys, with transfers discussed separately where relevant.

The majority of payments were made using cash or a card, and the movements in the number of these two payment methods largely drive the movement in the total number of payments between surveys (Table 3). However, a more useful measure of the use of each payment instrument is the share of total payments made using that instrument. This measure abstracts from the movement in total payments, and allows a more reliable comparison of the use of different payment methods over time.

Table 2: Transfers Recorded in Diaries – 2013
Per cent of total consumer payments Median value
Number Value
Total 4 24 100
To family and friends 2 6 50
Between one's own accounts(a) 2 18 200

Note: (a) Includes repayment of loans (e.g. credit card balances and home loans)

Source: Colmar Brunton

Table 3: Number of Payments Recorded in Diaries
Per respondent per week
Payment instrument Number of payments
2007(a) 2010 2013
Total(b) 12.7 15.6 13.0
Cash 8.6 9.5 6.1
Cards 3.3 4.8 5.5
Debit cards 1.8 3.4 3.1
Credit and charge cards 1.4 1.4 2.4
BPAY 0.3 0.5 0.4
Internet or phone banking na 0.4 0.2
PayPal na 0.1 0.3
Cheque 0.1 0.1 0.1
Other 0.2 0.1 0.3
Memo item: direct debit 1.1 0.4 0.4

Notes: Figures may differ slightly from published results of the 2007 and 2010 surveys as this comparison does not adjust for differences in coverage
(a) Number of payments recorded over the two-week survey period divided by two
(b) Numbers do not add because for some entries respondents did not record the payment method used; excludes direct debit payments

Sources: Colmar Brunton; Roy Morgan Research

Focusing on shares, the 2013 data show that the trends evident in the use of payments between 2007 and 2010 continued into 2013 (Table 4). A further decline in the use of paper-based payment methods was reported. In particular, the share of payments made using cash fell to 47 per cent. Nonetheless, cash remained the most used method of payment, accounting for around half of all payments by number. Cheque use also continued to decline, from an already low base. In contrast, the use of electronic payment methods increased. The share of payments made by card continued to rise and an increase in the use of PayPal was recorded. The use of other electronic payment methods was largely unchanged. Similar patterns and trends are observed when comparing the share of expenditure using each payment method.

Table 4: Use of Payment Methods over Time
Per cent of all payments
Payment method Number of payments Value of payments(a)
2007 2010 2013 2007 2010 2013
Cash 69 62 47   38 29 18
Cards 26 31 43   43 43 53
Debit cards 15 22 24   21 27 22
Credit and charge cards 11 9 19   23 16 31
BPAY 2 3 3   10 10 11
Internet or phone banking(b) na 2 2   na 12 10
PayPal(b) na 1 3   na 1 2
Cheque 1 1 0(c)   6 3 2
Other 1 1 2   3 3 5

Notes: Excludes entries with missing payment method information
(a) Payments of $9,999 or more are excluded for comparability across waves because payment value was truncated at $9,999 in the 2007 survey; further, the small number of such payments that occur during any week generates significant volatility in shares over time
(b) Not collected in 2007
(c) Rounds to zero

Sources: Colmar Brunton; Roy Morgan Research

The main trends evident in the consumer survey are consistent with the Retail Payments Statistics (RPS) data collected from financial institutions by the Reserve Bank. These aggregate data on non-cash payments indicate that card payments have grown strongly, while cheque use has declined (Figure 1). Further, data on cash withdrawals suggest that the share of payments made by cash has declined; growth in the value of cash withdrawals has been consistently below the growth rate of nominal consumption throughout the period over which the three surveys have been conducted. At a more detailed level, however, certain results of the survey appear at odds with the RPS. For example, the survey suggests growth in the number of credit card payments relative to debit card payments, which is contrary to the aggregate data in the RPS. Feedback from participants in the study suggests that some respondents may have confused debit cards from MasterCard and Visa with these schemes' credit cards, particularly when making a debit card payment over the internet or by pressing the ‘credit’ button on merchant terminals.[5] A comparison with the RPS and other data also suggests that the survey may understate growth in the use of BPAY and in ATM withdrawals. Overall, however, there is a high level of consistency between the survey data and other available statistics, particularly in respect of the key themes, indicating that the survey provides a useful tool to explore changes in the pattern of payments in Australia. Appendix B contains a more detailed comparison of the survey results with other statistical sources.

Figure 1: Non-cash Payments per Capita

Another ongoing trend is that growth in online shopping has led to an increase in the share of purchases being made remotely (i.e. not at the physical point of sale), from 6 per cent in 2007 to 14 per cent in 2013 (Table 5). Internet payments (which include smartphone payments) grew as a share of all remote payments made in the survey from just over half in 2007 to around 90 per cent in 2013, with a corresponding fall in postal and telephone payments. Growth in online retail has also been stronger for certain merchants; significant proportions of payments for holidays and travel, electrical and furniture, leisure, sport and entertainment, as well as ‘other’ were made remotely in 2013.[6] These trends would also have had some impact on the use of payment methods.

Table 5: Payments by Channel
Share of purchases
(Per cent)
Median value
2007 2010 2013 2013
Remote purchases as a per cent of total purchases:
Number 6 9 14  
Value 21 29 45  
Per cent of number of remote purchases:
By channel
Internet 55 79 90 74
of which: smartphone(a) na na 5 80
Telephone (voice call) 31 17 8 150
Mail (via post) 14 4 2 70

Note: (a) Smartphone payments were recorded as a separate category only in 2013

Sources: Colmar Brunton; Roy Morgan Research

In the 2013 diary, lower-value payments were typically made with cash, while card payments became more common for larger payment values and other electronic payments were typically used for only for higher-value payments (Figure 2). Over time, electronic payments have increasingly been used for lower-value payments.

Figure 2: Payment Method Used by Payment Value – 2013

Certain payment methods were also used more often at specific merchant categories, for example, cash was more heavily used for payments to food retailers compared with holiday expenditure or bills, which were typically paid using cards or other electronic methods (Table 6). Over time, this pattern has also changed, in part driven by growth in online retail.

Table 6: Payment Method by Merchant Category – 2013
Per cent of total no of consumer payments Per cent of number of payments at each merchant made using:(a)
Internet or
Food retailers
Pub/bar 2 76 12 12 0 0 0 0 0
Small food store 7 73 16 10 0 0 0 0 0
Take-away/fast food 10 73 17 9 0 0 0 0 0
Café/restaurant 9 70 16 13 0 0 0 0 0
Petrol/service station 6 31 39 27 0 0 0 0 2
Transport 4 58 18 16 1 1 0 0 6
Services 3 50 21 17 2 5 1 2 1
Holiday travel 1 4 22 52 4 10 4 1 3
4 49 16 20 1 3 7 1 3
Goods retailers
Other retailers 15 41 26 21 0 0 8 0 3
Electrical/furniture 1 16 27 34 1 1 19 0 2
Supermarket 21 38 36 23 0 0 0 0 2
Household bills 8 12 14 19 37 12 1 2 3
Medical/health 3 31 27 35 2 1 0 1 2
Other 6 46 14 14 5 4 12 1 4

Note: (a) Figures may not sum to 100 due to rounding; in some cases observations have been rounded to zero

Source: Colmar Brunton


This will not affect the accuracy of the data for total cards, but suggests a slightly wider degree of error around the data when split between debit and credit cards. [5]

This accords with ABS data that suggest that at least half of all internet users had purchased items such as travel services, tickets, music and books or clothing online in 2012/13, and that only 19 per cent had purchased supermarket goods (ABS 2014). [6]