The rise of mobile wallets and the shift to cashless payments in Australia and New Zealand

Australia and New Zealand are witnessing a rapid transformation in how people transact. The steady rise of mobile wallets and the accelerating shift to cashless payments has redefined the financial landscape. Consumers reach for their smartphones or smartwatches more in recent years, instead of banknotes, while businesses and regulators adapt to a payments ecosystem dominated by digital transactions. These digital payments trends are shaping a cashless future in the AU/NZ context. The region is emerging as a leader in payments innovation and industry players are shifting to meet the demands of this new era.

Mobile wallet adoption continues to climb

Mobile wallets have moved into the mainstream across both countries. In Australia, Reserve Bank data shows that about 35% of all card transactions were made using digital wallets in mid-2023, up from just 10% in early 2020. Younger consumers are leading the charge, with two-thirds of Australians aged 18–29 regularly using mobile payments. Even older demographics are catching on, with use among Australians over 65 having tripled since 2019.

New Zealand is seeing similar movement. A 2024 Payments NZ survey found that 15% of Kiwis now prefer mobile wallets for everyday purchases, up from 10% just two years earlier. Smartphone penetration, user-friendly interfaces, and the ease of one-tap transactions have driven this shift. Mobile wallets also offer a blend of convenience and enhanced security, thanks to biometric ID and tokenisation technology.

These trends reflect a larger behavioural change. Australians and New Zealanders increasingly expect fast, secure, and seamless ways to pay. Mobile wallets are no longer a novelty but a preferred choice for a growing number of people.

Cash usage continues to fall

The rise of digital wallets coincides with a dramatic decline in the use of physical cash. In Australia, just 13% of consumer payments were made in cash in 2022, down from 69% in 2007. For the first time, the total value of mobile wallet payments has overtaken ATM withdrawals. In New Zealand, cash now accounts for only 6% of transactions.

Consumers are simply carrying less cash. Most day-to-day transactions can now be completed via card, phone, or wearable. Even small businesses and market stalls have embraced mobile EFTPOS and QR-based payments. As digital becomes the default, carrying physical currency is increasingly optional.

This shift has accelerated since the pandemic. Contactless payments surged in popularity during periods of lockdown and social distancing, and that behaviour has stuck. Consumers have come to expect tap-and-go options wherever they shop.

Technology drives more seamless experiences

The shift to cashless payments is being fuelled by infrastructure investment and innovation. Australia was one of the first countries to adopt contactless card technology at scale, laying the foundation for widespread mobile wallet use. Nearly all terminals across both countries now support contactless and NFC payments.

New technology is also lowering the barrier to entry for merchants. SoftPOS, or "tap on phone" technology, enables any compatible smartphone to accept payments without a separate terminal. Novatti, for example, offers softPOS functionality that turns Android phones into mobile payment hubs, making digital acceptance more accessible for small businesses.

Real-time payment platforms like Australia’s New Payments Platform (NPP) and PayTo service have further modernised the payment experience. These innovations allow fast, secure, bank-to-bank transactions, offering alternatives to cards and direct debits. In New Zealand, similar developments are underway, with local fintechs introducing real-time and app-based transfer tools that serve as digital cash alternatives.

Policy is catching up to innovation

As the ecosystem evolves, regulation will, too. In Australia, digital wallet providers like Apple Pay and Google Pay are potentially set to be brought under the same regulatory framework as traditional payment systems. New legislation aims to ensure transparency, competition, and consumer protection across all payment platforms, regardless of whether they originate from banks or tech giants.

New Zealand is also advancing reforms. The Retail Payment System Act 2022 introduced interchange fee caps and increased oversight of card payment networks. These moves have reduced the cost burden on merchants and promoted broader acceptance of mobile and contactless payments. Open banking legislation is also progressing, creating opportunities for more integrated and competitive digital payment services.

Governments and regulators are working to ensure that this cashless transition remains inclusive. Both countries recognise the need to support groups who still rely on cash, such as older adults and people in rural areas. Ensuring choice and accessibility will be critical to maintaining trust in the system.

Leading the way in digital payments

Australia and New Zealand have built an environment where cashless payments can thrive. High smartphone adoption, modern infrastructure, and a willingness to embrace new technology have set the stage for continued growth.

For payment providers, enabling fast, flexible, and secure experiences is critical. Novatti’s work in online payments, Asian wallet integrations, and card acceptance helps businesses across sectors meet customer expectations in an increasingly digital economy.

As the payments ecosystem continues to evolve, digital wallets will play an increasingly central role in daily commerce. With strong foundations already in place, Australia and New Zealand are well-positioned to lead the next phase of innovation in cashless payments.

As the shift to cashless payments continues to accelerate, Novatti is positioned to support businesses navigating the transformation. Novatti enables organisations to offer their customers modern payment solutions, with expertise across payment acceptance and wallet integrations. By combining local insight with global capability, Novatti continues to play a leading role in shaping the future of payments across Australia, New Zealand and beyond.

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