Payments in Australia: Costs and Use Carl Schwartz (on behalf of - - PowerPoint PPT Presentation

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Payments in Australia: Costs and Use Carl Schwartz (on behalf of - - PowerPoint PPT Presentation

Mar 02, 2023 194 likes •561 views

Payments in Australia: Costs and Use Carl Schwartz (on behalf of many others) Reserve Bank of Australia Overview Payment activity Payment costs - Aggregate - Financial institutions - Merchants - Overall per payment costs - The

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Payments in Australia: Costs and Use

Carl Schwartz (on behalf of many others) Reserve Bank of Australia

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Overview

Payment activity Payment costs

  • Aggregate
  • Financial institutions
  • Merchants
  • Overall per payment costs
  • The influence of payment size
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Payment Activity

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Payment Share by Number

Other BPAY Cheque Credit Scheme debit EFTPOS Cash

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Payment Share by Number

Other BPAY Cheque Credit Scheme debit EFTPOS Cash

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Payment Share by Number

Other BPAY Cheque Credit Scheme debit EFTPOS Cash

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Payment Share by Value

Cash Other BPAY Cheque Credit Scheme debit EFTPOS Scheme debit EFTPOS

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20 40 60 80 20 40 60 80

Use of Cash

Per cent of number of payments

0-10

Cash

11-25 76-100 26-50 51-75 101-150 151-200 201-500 500+

% %

Other methods

Payment value ($)

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Median Payment Values

20 40 Cash 60 80 100 Credit EFTPOS Scheme debit BPAY Transaction value Personal cheque

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Payment Costs

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Measuring Costs

Resource costs

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Measuring Costs

Resource costs Average costs

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Measuring Costs

Resource costs Average costs Sample of financial institutions and merchants

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Measuring Costs

Resource costs Average costs Sample of financial institutions and merchants Indicative rather than definitive estimates

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Financial institution account overhead costs Financial institution direct payment costs Merchants

Aggregate Costs of Payments by Individuals

Around 0.8 per cent of GDP

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Aggregate Costs of Payments by Individuals

Around 0.8 per cent of GDP

Financial institution account overhead costs Financial institution direct payment costs Merchants

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20 40 60 80 100 20 40 60 80 100

Financial Institution Account Overhead Costs

Annual average per account $ $ Credit card accounts Transaction accounts

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0.30 0.60 0.90 1.20 0.30 0.60 0.90 1.20

Financial Institution Card Payment Costs

Credit card $ $ EFTPOS Per average transaction for each payment method

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0.30 0.60 0.90 1.20 0.30 0.60 0.90 1.20

Financial Institution Card Payment Costs

Credit card $ Payment function $ EFTPOS Credit function and reward program Per average transaction for each payment method

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Financial Institution Cash Costs

$0.75 ATM withdrawals Per Withdrawal / Deposit

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Financial Institution Cash Costs

$0.22 EFTPOS cash-outs $0.75 ATM withdrawals Per Withdrawal / Deposit

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Financial Institution Cash Costs

$3.40 Branch withdrawals / deposits $0.22 EFTPOS cash-outs $0.75 ATM withdrawals Per Withdrawal / Deposit

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0.04 0.08 0.12 0.16 0.20 0.04 0.08 0.12 0.16 0.20

Financial Institution Cash Payment Costs*

* Including public sector costs of currency production

Branches ATMs EFTPOS cash-out and currency production Cash $ $ Per average transaction for each payment method

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0.10 0.20 0.30 0.40 0.10 0.20 0.30 0.40

Merchant Payment Costs

Per average transaction for each payment method Credit card EFTPOS Cash $ $

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0.10 0.20 0.30 0.40 0.10 0.20 0.30 0.40

Merchant Payment Costs

Per average transaction for each payment method Credit card EFTPOS Cash $ $ Tender time Other costs

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0.20 0.40 0.60 0.80 1.00 1.20 0.20 0.40 0.60 0.80 1.00 1.20

Total Payment Costs*

Per average transaction for each payment method Credit card

Financial institution**

$ EFTPOS Cash $

* Resource costs excluding account overhead costs ** Including costs of currency production for cash

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0.20 0.40 0.60 0.80 1.00 1.20 0.20 0.40 0.60 0.80 1.00 1.20

Total Payment Costs*

Per average transaction for each payment method Credit card

Financial institution**

$ EFTPOS Cash $

Merchant

* Resource costs excluding account overhead costs ** Including costs of currency production for cash

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0.20 0.40 0.60 0.80 1.00 1.20 0.20 0.40 0.60 0.80 1.00 1.20

Total Payment Costs*

Per average transaction for each payment method Credit card

Financial institution**

$ EFTPOS Cash $

Merchant Consumer

* Resource costs excluding account overhead costs ** Including costs of currency production for cash

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1 2 3 4 5 1 2 3 4 5

Total Payment Costs - Non-point of Sale*

$ $ Cheque BPAY Direct debit

Financial institution

Per average transaction for each payment method

* Resource costs excluding account overhead costs

Merchant Consumer

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The Influence on Costs of Payment Size

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Costs and Payment Size

Cash and credit card costs rise more with payment size than EFTPOS

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Costs and Payment Size

Cash and credit card costs rise more with payment size than EFTPOS EFTPOS therefore becomes lowest cost for payments of moderate value

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Costs and Payment Size

Cash and credit card costs rise more with payment size than EFTPOS EFTPOS therefore becomes lowest cost for payments of moderate value On narrow measure of costs, credit card becomes lower cost than cash for higher payment values

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Key Findings

Aggregate payment costs Cash Cards Other payment methods

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