In an age where technology is rapidly transforming our daily lives, we are on the brink of a significant shift in the way we handle our finances. The humble wallet, once a staple of every purse and pocket, filled with various cards and cash, may soon become a relic of the past.
According to recent estimates by Money.com.au, if the current trend continues, the country could see bank cards become obsolete within the next seven years, with mobile wallets taking centre stage.
Data from the Reserve Bank of Australia (RBA) paints a clear picture of this digital revolution. From 2020 to 2023, the share of mobile wallet transactions skyrocketed from 11 per cent to an impressive 35 per cent.
If this trajectory holds, projections suggest that by 2032, mobile wallets could be responsible for every retail card payment in the country.
Peter Drennan, a research and data expert at Money.com.au, highlights the rapid adoption of mobile wallets, saying, ‘We are 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 devices.’
‘Transactions are increasingly being made via mobile phones, smartwatches, or other wearable devices,’ he explains.
‘Unlike physical cards, which can be forgotten, lost, or stolen, e-wallets provide a more convenient alternative for everyday payments.’
The past three years have seen a modest 11 per cent growth in debit card use. In stark contrast, mobile wallet usage has reportedly surged by a staggering 475 per cent, growing approximately 43 times faster.
While the number of transactions made with physical cards inched up from 563 million to 625 million, mobile wallet transactions leapt from 70 million to a staggering 400 million.
Finance expert Sean Callery explains the increasing preference for mobile wallets, saying, ‘Mobile wallets are not just about convenience anymore, they are quickly becoming the go-to way to pay.’
He continues, ‘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.’
However, there is interestingly a noticeable disparity in the average transaction values between mobile wallets and physical cards.
On average, transactions using mobile wallets are at $40. Compared with the $84 average for non-mobile wallet transactions, this is significantly lower.
Drennan suggests that this difference may slow down the broader adoption of mobile wallets as consumers still tend to use physical cards for transactions at smaller merchants, for large purchases or financing, and for booking travel or accommodation where a card is often required 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,’ he explains.
We invite you, our YourLifeChoices readers, to share your thoughts and experiences with mobile wallets. Have you made the switch, or are you holding onto your physical cards? What concerns or advantages do you see in this digital transition?
Your insights could help others navigate this new financial frontier. Join the conversation below.
Also read: A new era of shopping: Is the future cashless and checkout-free?
