Credit culled as New Payments Platform, debit cards soar

Latest payments data shows electronic transactions surge and a continued drop in credit card and cash transactions.

Waves of government economic support have allowed thousands of Australians to pay off debt. Picture: iStock

The payments landscape has had a dramatic shift in the past year, with consumers ditching credit cards and cheques, and preferring to purchase electronically.

The latest retail payments update from the Reserve Bank shows the real winner from the past year of pandemic has been the New Payments Platform, as the value of payments made across the platform has grown 71.5 per cent.

This follows the 207.1 per cent growth the NPP experienced last year.

The NPP, which launched in 2018 via the Pay ID and Osko functionality, was first announced in 2013. It is an open-access payments infrastructure spearheaded by the Reserve Bank and driven by a co-operative formed by all major banks, that delivers near real-time funds availability to the recipient, with richer remittance information than other systems.

The rapid and continued rise in transactions across the platform leaves it as near equal with credit and debit cards in dollar value.

As of February, the NPP captured $60.6bn in payments.

However, the RBA data reveals the NPP is raking in much of the value of its transactions in significantly larger transactions than those handled by its credit and debit card stablemates.

Almost 63.2 million transactions were made across the NPP as of February, compared to the 1013.6 million transactions made using debit and credit cards in the same time period.

The data reveals ATM withdrawals now sit 13.9 per cent below their pre-pandemic levels.

But the decline in ATM withdrawals has not been met with an accompanying decline in note printing, with the value of banknotes in circulation growing 17.1 per cent in the 12 months prior to February.

The ATM drop comes with an accompanying 19.1 per cent rise in debit card spending, which has come largely at the expense of credit cards.

The value of credit and charge card transactions has declined 8.6 per cent in the past year.

Total outstanding balances on credit cards is now 20.7 per cent below pre-pandemic levels, as waves of government economic support have allowed thousands of people to pay off debt.