Issue 5

Since the introduction of scheme debit cards, an increasing number of Australians have chosen to move away from credit cards and spend their own money when making payments.

This shift has largely been driven by the youth demographic, who are significantly more likely to own and use debit cards, although people of all ages are recognising the benefits of avoiding credit card debt.

Figures from the Reserve Bank show that the number of debit transactions made over the last financial year has increased by 15 per cent, in comparison to just an 11 per cent growth in credit transactions*.

This increased uptake in debit cards has prompted a subsequent demand from consumers to make bill payments from a debit card account. BPAY's 2008 Usage and Attitude Study showed that 18 per cent of bills (across all payment methods) were paid via debit card over the past 12 months, and this figure is expected to increase in 2009.

For businesses with a young consumer base, accepting BPAY payments from a scheme debit account makes sense and assists in strengthen their value proposition to this target group.

More generally, with current economic conditions continuing to encourage consumers to look for new ways to tighten their belts and reduce unnecessary spending, the cost benefit of using BPAY has never been more relevant. The option to pay bills from a debit account is another way billers can assist customers looking to make budget conscious decisions.

* RBA Payment Systems Annual Report 2008