Australia payments market seen reaching $1.35 trillion by 2034

By AI, Created 4:41 PM UTC, May 18, 2026, /AGP/ – Australia’s payments market is expanding on the back of mobile wallets, buy-now-pay-later, real-time rails and tighter regulation. The market hit $849.1 billion in 2025 and is forecast to reach $1.35 trillion by 2034, with fintechs, banks and global platforms racing to adapt.

Why it matters: - Australia’s payment system is moving away from cash and toward digital, real-time and embedded payments. - The shift is reshaping merchant costs, consumer checkout behavior and competition between banks, fintechs and global payment platforms. - New rules are also pulling more parts of the payments stack into formal oversight, which could change how products are built and priced.

What happened: - The Australia payments market reached USD 849.1 billion in 2025. - The market is forecast to hit USD 1,345.4 billion by 2034. - The forecast implies a compound annual growth rate of 5.09% from 2026 to 2034. - The source dated the release May 14, 2026. - The Treasury Laws Amendment (Payments System Modernisation) Act 2025 took effect in December 2025. - The Reserve Bank of Australia is expanding its regulatory reach to digital wallets, buy-now-pay-later providers and payment gateways. - The Reserve Bank of Australia is proposing a ban on card surcharges from January 2026 and lower domestic interchange fee caps. - Fintech firms hold about 56% of Australia’s merchant acquiring market and are growing three times faster than traditional bank acquirers. - Stripe is committing AUD 85 million to expand its Sydney engineering hub. - Amazon Australia is adding Afterpay as a payment option.

The details: - Mobile wallet transactions account for 44% of all device-present transactions acquired. - Apple Pay, Google Pay and Samsung Pay are driving contactless adoption in retail and hospitality. - The buy-now-pay-later market was valued at USD 14.7 billion in 2025 and is projected to reach USD 42.8 billion by 2034. - That BNPL forecast implies a 12.27% CAGR. - BNPL penetration has climbed to 31% of online transactions. - Cash usage has fallen from 69% of consumer transactions in 2007 to 13%. - ATM withdrawals are down nearly 9% year over year. - Bank ATM numbers have dropped from about 14,000 to roughly 5,700. - Forty-six percent of Australian businesses maintain four or more payment instruments. - Forty-five percent of businesses are trying to improve their payment capabilities across physical and digital channels. - The New Payments Platform enables instant 24/7 bank transfers and PayID, linking payments to phone numbers or email addresses instead of account numbers. - ANZ’s Express Payments service is expanding for inbound international transactions processed in near-real time. - BNY and Commonwealth Bank are delivering international payments within 60 seconds regardless of the recipient’s bank. - New South Wales and the Australian Capital Territory hold the largest regional share of payment transactions. - Their lead is supported by population density, fintech activity, digital infrastructure and enterprise adoption. - AI is being used across fraud detection, customer service, personalization, biometric authentication and regulatory compliance. - A survey found 72% of Australian financial firms are already deploying AI tools. - Forty-two percent of those firms said AI is meeting expectations. - Twenty percent said AI is beating expectations. - Commonwealth Bank is using AI-powered transaction monitoring to flag and block fraud before completion. - Commonwealth Bank is also using AI-powered customer service agents to handle common queries and escalate complex cases. - AI-driven compliance systems are helping providers monitor transactions for anti-money laundering obligations and changing BNPL and payments rules. - The report lists Commonwealth Bank of Australia, ANZ, Westpac, NAB, Afterpay, Zip Co, PayPal, Stripe, Tyro Payments and Square among key players. - IMARC Group includes retail, entertainment, healthcare, hospitality and other sectors in its market segmentation.

Between the lines: - The biggest shift is not just growth in payment volume. It is the reordering of who controls the customer relationship, from banks toward wallet providers, BNPL platforms and embedded payment software. - Regulatory changes appear aimed at catching up with how Australians already pay, especially in digital wallets and BNPL. - Merchant economics may come under pressure if surcharge bans and lower interchange caps move forward. - AI adoption suggests payments firms are trying to balance faster growth with tighter fraud controls and more automated compliance.

What’s next: - The proposed card surcharge ban and interchange changes could further pressure payment fees and merchant pricing models. - BNPL licensing and consumer credit rules are likely to keep tightening oversight of the segment. - More banks and fintechs are expected to expand real-time, cross-border and wallet-linked payment products. - Competition should intensify as embedded finance, loyalty tools and personalized rewards become more important differentiators.

The bottom line: - Australia’s payments market is scaling fast, but the bigger story is structural change: digital wallets, BNPL, real-time rails, AI and new regulation are rewriting how money moves across the country.