Physical bank cards could become a thing of the past as digital wallets grow in popularity

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Physical bank cards could become a thing of the past as digital wallets grow in popularity

Payments made using a physical bank card could become a thing of the past in as little as seven years as Australians embrace mobile phone wallets at unprecedented rates.

With the share of mobile wallet transactions rising from 11 per cent to 35 per cent in just three years to 2023, finance platform Money.com.au is now tipping mobile wallets could account for all retail card payments by 2032 at the earliest.

The latest data from the Reserve Bank revealed mobile wallet usage grew about 43 times faster than debit cards over the three-year *******. There were over 500 million transactions on mobile wallets in October alone, totalling just over $20 billion.

Money.com.au finance expert said Sean Callery said there was a growing preference for mobile wallets.

“Mobile wallets aren’t just about convenience anymore, they’re quickly becoming the go-to way to pay,” he said.

“Physical cards aren’t obsolete yet, but it’s clear they’re losing ground as more people turn to the convenience and security of mobile wallets for everyday transactions.”

Money.com.au research and data expert Peter Drennan added it was a glimpse into a future where all transactions were made through a mobile phone.

“Unlike physical cards, which can be forgotten, lost, or stolen, e-wallets provide a more convenient alternative for everyday payments,” he said.

The *********** Banking Association last year reported payments made using mobile phone wallets had overtaken ATM withdrawals for the first time.

However, Money.com.au said there was still a noticeable difference in the size of transactions made through mobile wallets and physical cards.

Camera IconThere were over 500 million transactions on mobile wallets in October alone, totalling just over $20 billion. Credit: Supplied

The average transaction value for mobile wallets currently stands at $40, significantly lower than the $84 average for non-mobile wallet transactions.

Mr Drennan said the discrepancy may hinder broader adoption as consumers still gravitate towards physical cards for transactions at smaller merchants, for large purchases or financing, and for travel and accommodation bookings where a card was needed for verification.

Mr Drennan said mobile wallet providers like Apple Pay and

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Pay would need to come up with strategies to keep adoption speed on track.

“Otherwise, they will struggle to convert new users, particularly older generations who may be less tech-savvy or hesitant to trust digital payment systems over traditional cards,” he said.

“Getting past hurdles like familiarity, security worries, and making mobile wallets easy for older generations to use will be key to keeping the momentum going.”

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