Australian consumers are continuing to move away from cheques and cash in favour of cards and other electronic payments, according to the Australian Payments Clearing Association (APCA).
In its latest twice-yearly ‘Milestones Report’ the APCA, the Australian payments industry self-regulatory body, shows that cheque use in Australia dropped 13.9% in 2014 to 167m. This was offset by an 8.8% increase in the use of payment cards and a 7.5% increase in direct entry payments (direct debits and direct credits).
The report also shows that consumers are using less cash. In 2014, the number of automated teller machine (ATM) cash withdrawals dropped by 4.8% to 741m and by 2.1% in value to A$143bn.
Cheque use in Australia has been declining for over a decade. A comparison between the months of December 2002 and December 2014 shows a 71% drop. Cheque values remain in flux suggesting that the majority of cheques still being used are for high value business transactions and for property settlement.
In 2014, the value of cheques increased slightly by 0.7% to A$1,228bn. This compares to a 6.2% increase in the value of card payments and a 4.8% increase in the value of direct entry payments.
“These figures reflect the two sides of the cheques story,” said APCA chief executive (CEO) Chris Hamilton. “First, cheques are rapidly falling out of everyday use. Second, there are some specialised contexts – like real estate – which are more resilient. These are gradually being whittled away by more efficient automated solutions – like the new Property Exchange Australia (PEXA) service.
“I am confident that as these solutions come on line we will see cheque values dropping at the same rate as cheque numbers. If you still rely on your cheque book, I encourage you to look at the alternatives that are already widely available, cheap, and reliable.”
The report also notes the work underway by the payments industry and government to ease the transition from cheques to digital payments including:
- The introduction of electronic conveyancing for property settlement through the PEXA service.
- The government’s SuperStream initiative to improve the efficiency of the superannuation system.
- The New Payments Platform, a major industry initiative to develop new infrastructure for fast, flexible data rich payments.
- A comprehensive review by the Australian Payments Council (APC) which will look at legacy payments, innovation and technology.
Despite being behind the likes of Europe and China, the US payments industry is now rapidly advancing, said Anish Kapoor, CEO of AccessPay told GTNews in an exclusive interview.
Treasurers are more interested in cross-border payments and automation than real-time payments, as they are consistently asked to do more with less, argues Rick Burke, head of corporate payments at TD Bank in an exclusive interview.
The top five sectors Asian fintech investors are interested in are data analytics, blockchain, lending, payments and regtech, according to Gary Hwa, EY regional managing partner.
On the third day of the Singapore Fintech Festival conference, there was a focus on specific applications of fintech innovation. One was trade finance, which is clearly is ripe for a revolution.