COVID-19 Reshapes E-commerce Payment Methods for Retailers and Consumers

The e-commerce market in Australia has grown steadily over the past few years, and despite the recent pandemic, it has only further accelerated this growth.

Australia's e-commerce market is forecast to grow at a compound annual growth rate (CAGR) of 12.3 percent between 2016 - 2020 to reach $52.2 billion AUD in 2020, according to GlobalData.

"Social distancing, self-isolation, closure of brick and mortar stores due to lockdown measures have led to a higher preference for online channels by consumers for making purchases during the pandemic. The current crisis opened the e-commerce market to a whole new set of consumers who were earlier not using online channels," said Ravi Sharma, Banking and Payments Lead Analyst at GlobalData.

According to a report by Australia Post, in April this year, 200,000 new shoppers entered the online retail space in Australia, and according to GlobalData's 2020 Banking and Payments Survey, credit and debit cards are the most preferred method for e-commerce payments.

Alternative payments like PayPal, Apple Pay and Google Pay are also increasing due to its added convenience and contactless abilities.

Buy Now, Pay Later services are also becoming popular in Australia. It is increasingly being preferred by milennials as they use the service as a budgeting tool.

"E-commerce has become the default option for several customers in Australia and is set to remain the preferred method even beyond this pandemic."