Australia: 2025 analysis of payments and ecommerce trends

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.

• PayID: the NPP’s addressing service, allows users to register a mobile phone number or email address as an alias for their bank state branch (BSB) and account number. There are currently over 18.5 million registered PayIDs in Australia, according to Australian Payments Plus data, and usage is well up among businesses – for good reason. By the end of 2025, PayID registrations are expected to reach 20 million, driven by its ease of use and enhanced security features.

• PayTo: supported by all major banks under the NPP framework, PayTo enables secure one-click payments and recurring transactions, replacing traditional direct debits. It is expected to become crucial for merchants' payment strategies by 2025. This system will offer benefits such as no surcharges on large transactions, secure one-click bill payments, and simplified back-end management for merchants.

• NPP: the adoption of the New Payments Platform (NPP) for real-time A2A payments has been rapid compared to similar systems overseas. The 2025 AP+ Roadmap outlines key industry and regulatory requirements alongside other major initiatives as a reason for this.

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:

• The NPP is enabling services like Azupay's 'AzupayID' for QR code payments;

• Eftpos, Australia's national debit card scheme, is rolling out a QR code payment network for online, mobile, and in-store transactions.
  
  

Blockchain and AI

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

• Platforms like Instarem use Ripple’s blockchain solutions to streamline treasury operations and reduce processing times;

• Generative AI is transforming payment systems with innovations like virtual remittance assistants that automate payment tracking and error detection;

• Blockchain is enabling faster, more affordable remittances by eliminating intermediaries, with stablecoins emerging as a tool to reduce transaction fees further.

Main players in the payments ecosystem

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

• Commonwealth Bank, ANZ, Westpac, and NAB (The ‘Big 4’) – dominating traditional banking services while expanding into digital payments;

• PayPal, Stripe, and Square – global payment processors supporting businesses with online transactions;

• Afterpay, Zip, and Klarna – leading BNPL providers influencing consumer spending habits;

• Apple Pay, Google Pay, and Samsung Pay – mobile wallet providers driving contactless and mobile payments.

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:

• Eftpos – a longstanding Australian payment network, now supporting real-time transactions;

• Osko by BPAY – an RTPs provider leveraging NPP infrastructure;

• Visa, Mastercard, and American Express – dominant card networks offering innovative security features;

• Cryptocurrency platforms such as Binance and CoinSpot – Facilitating digital asset transactions.

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

o Amazon Australia: the dominant player with 88 million monthly visits, known for its vast product range, fast delivery, and logistical innovations;

o eBay Australia: a long-standing marketplace with approximately 51 million monthly visits, offering auction and direct-sale formats.

• Local marketplaces and retailers

o Kogan.com: a leading Australian online retailer specialising in electronics, home goods, and personal products;

o Woolworths: a top supermarket chain with a strong online presence, offering groceries and household items;

o Coles: another major grocery retailer competing in the online shopping space;

o Big W: a discount department store under Woolworths Group, offering a wide range of products online;

o Kmart: a popular retailer with a growing ecommerce platform for affordable goods;

o Others: JB Hi-Fi, The Iconic, and Bunnings – major retailers expanding their digital presence.

• Other noteworthy platforms

o Catch.com.au: a marketplace offering deals across various categories, including fashion, electronics, and home goods;

o MyDeal: an Australian-owned marketplace providing tailored support to sellers and access to millions of customers monthly;

o The Iconic: a leader in online fashion retail, appealing to younger demographics with trendy offerings.

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:

1. Payment surcharging regulations: the RBA is reviewing merchant card payment costs and surcharging practices. In January 2025, the RBA released an issues paper titled ‘Merchant Card Payment Costs and Surcharging’, inviting stakeholder feedback on potential regulatory adjustments. The Australian Government has proposed banning debit card surcharges from 1 January 2026, subject to the outcomes of this review. 

2. BNPL regulation: effective 10 June 2025, BNPL providers in Australia must hold an Australian credit licence and comply with responsible lending obligations under the National Consumer Credit Protection Act 2009. The Australian Securities and Investments Commission (ASIC) is consulting on draft regulatory guidance to ensure these measures protect consumers while allowing the BNPL industry to grow responsibly. 

3. Consumer Data Right (CDR) expansion: the Australian Government is expanding the CDR to include non-bank lending and BNPL products. This expansion aims to enhance consumer control over personal data and promote competition across various sectors. The Treasury Laws Amendment (CDR) Act 2024 introduced ‘action initiation’, allowing consumers to authorise accredited service providers to initiate actions on their behalf, such as making payments or updating personal information.

4. Project Acacia – exploring wholesale CBDCs: the RBA, in partnership with the Digital Finance Cooperative Research Centre (DFCRC), is also conducting Project Acacia to assess the role of digital money in wholesale markets. From February to March 2025, the RBA and DFCRC will engage with selected parties on their detailed use case proposals, including consideration of regulatory implications. Development and testing of selected use cases are scheduled from May to October 2025.

    

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.

About Ignacio Carballo

Dr Ignacio Carballo is the Director of Alternative Finance at PCMI. He leads consulting engagements for the world’s most innovative institutions, helping them build a more inclusive and responsible financial system while maintaining a competitive edge in the market. Prior to joining PCMI, Ignacio spearheaded several research projects for private, public, and multilateral organisations. He is a professor at various universities in Latin America and serves as Director of the Center for Alternative Finance at the Catholic University of Argentina.

About Payments and Commerce Markets Intelligence (PCMI)

PCMI is an advisory group focused on the global payments industry, with over 30 years of experience providing market intelligence to global corporations, having executed over 500 client engagements in the payments industry since 1991. PCMI performs custom strategic engagements, including market sizing, opportunity benchmarking, market entry, customer insights, and more, covering over 50 global markets in the Americas, EMEA, and APAC regions.