Table Of contents
OVERVIEW
Catalyst
Summary
EXECUTIVE SUMMARY
The Australian economy: global uncertainty is driving stagnation
Consumer demand for all forms of credit continues to weaken, especially outside the housing sector
Two-speed economy causes uneven growth across different market segments
Australia's payment card market in 2011: low demand, high usage
In 2011, demand for new cards was the slowest in 10 years
Despite uncertain economic times, transaction values have grown strongly in the past five years
The use of ATMs has reached a stagnation point, signifying a step toward cashless payments
Balancing the benefits for consumers and the payment industry
RBA acts on excessive surcharging to reflect the true cost of acceptance
Implementation of new consumer credit protection laws will provide transparency at some cost
2012: a turning point for the Australian cards market
Future growth will rely on systemic growth, as new demand will remain low
Credit card annual transaction values will grow by 3.7% in 2012
Double-digit growth is still expected for debit card transactions
Consumers will use less cash, triggering a turning point for ATM transactions
THE AUSTRALIAN ECONOMY: GLOBAL UNCERTAINTY IS DRIVING STAGNATION
The economic outlook will remain modest due to a strong dependency on the global economy
Uncertainty weakened the demand for credit in 2011
The unemployment rate and GDP growth did not provide a clear direction for Australia in 2011
Consumer demand for all forms of credit continues to weaken, especially outside the housing sector
Two-speed economy causes uneven growth across different market segments
Overall, income growth was relatively unaffected during and following the global financial crisis
Australia's two-speed economy is reflected in the state of the retail sector
AUSTRALIA'S PAYMENT CARDS MARKET 2011: LOW DEMAND, HIGH USAGE
2011: changes in consumer behavior have shifted the Australian payment landscape
Low confidence has pushed consumers to consolidate their accounts
However, the use of cards at the POS has increased rapidly
The use of ATMs has reached a stagnation point, signifying a step toward cashless payments
Demand for new payment cards is down, but usage is up
In 2011, demand for new cards was the slowest in 10 years
Despite uncertain economic times, transaction values have grown strongly in the past five years
Average transaction value has decreased, but not for charge cards
There is significant room for payment cards to grow in low value retail payments
Cautious consumers are increasing their repayment levels
Increased repayments put extra pressure on the growth of outstanding balance
Revolving credit card debt grew at the slowest pace in 10 years in 2011
Despite economic uncertainty, credit card delinquencies remain within a manageable level
BALANCING THE BENEFITS FOR CONSUMERS AND THE PAYMENT INDUSTRY
RBA acts on excessive surcharging to reflect the true cost of acceptance
RBA's preferred option: loosely set the limit surcharges based on the cost of acceptance
Regulatory landscape 2012: focus on protecting consumers
Implementation of new consumer credit protection laws will provide transparency at some cost
2012: A TURNING POINT FOR THE AUSTRALIAN CARDS MARKET
Future growth will rely on systemic growth, as new demand will remain low
Consumers will remain cautious in 2012, followed by stronger consumer sentiment in 2013
Low value transactions will drive further support to the growth of the Australian payment cards market
After a weak performance in 2011, the credit card market is expected grow strongly to 2013
Credit card annual transaction values will grow by 3.7% in 2012
The credit card market is expected to hold a total of A$53.3bn in personal debt by 2013
Debit cards will continue to dominate the growth of Australian payment cards
Double-digit growth is still expected for debit card transactions
Consumers will use less cash, triggering a turning point for ATM transactions
APPENDIX
Supplementary data
Definitions
(Untitled sub-section)
Methodology
Primary research
Secondary research
Forecast methodology
Further reading
Ask the analyst
Disclaimer
List Of Tables
Table: Credit card 90+ day delinquencies, 2011
Table: Historic and forecast market drivers under neutral, optimistic, and pessimistic scenarios, 2007–13 (1 of 2)
Table: Historic and forecast market drivers under neutral, optimistic, and pessimistic scenarios, 2007–13 (2 of 2)
Table: Historic and forecast credit card market under a neutral scenario, 2010–13f
Table: Historic and forecast debit card market under a neutral scenario, 2010–13f
Table: GDP quarterly growth and unemployment rate, 2005–11
Table: Personal lending growth in Australia, 2006–11
Table: Annual growth of personal income based on the average gross weekly earnings for full-time adults, 2006–11
Table: Retail trade annual growth, 2000–11
Table: Retail trade annual growth, by category and by state, 2011
List Of Figures
Figure: New payment tools will move consumers away from using ATMs
Figure: Credit card annual transaction values will grow by 3.7% in 2012
Figure: Australia narrowly avoided recession during the global financial crisis
Figure: Volatility in the Australian economy is reflected in both GDP growth and the unemployment rate
Figure: Personal lending is still growing, predominantly driven by the housing sector
Figure: Income growth remained unaffected during and following the recent global financial crisis
Figure: Retail trade slowed in 2011 as consumers avoided discretionary spending
Figure: Overall, there has been a drop in the number of accounts across Australian payment cards
Figure: Credit cards were the only payment card sector that experienced positive growth in 2011
Figure: Both the number and value of payment card transactions at the POS have grown substantially during 2006–11
Figure: Value per POS transaction has declined recently, while both frequency of use and turnover per card have increased
Figure: New payment tools will move consumers away from using ATMs
Figure: The negative growth in debit cards is responsible for the decline in the overall payment card market
Figure: Credit cards represent the lowest growth segment in payment cards by transaction value in 2011
Figure: Average value per transaction at the POS has been declining, except for charge cards
Figure: Cash still dominates the low value POS payments sector
Figure: Outstanding balances on pay later cards increased by A$1.1bn in 2011
Figure: Credit card revolving debt grew at the slowest pace over the past 10 years in 2011
Figure: A draft example of the key facts sheet for credit cards
Figure: Credit card annual transaction values will grow by 3.7% in 2012
Figure: The Australian credit card market will reach A$55.3bn of personal debt by 2013
Figure: Both the number and the value of ATM transactions are expected to experience a little growth in the coming years