Across Australia, digital wallet use is growing fast, with the payment method accounting for $160 billion in transaction volume in 2024, up 28% year over year. In-store, tapping a phone is as routine as using a card. Online, the checkout flow is as simple as one click.

This change built on existing infrastructure: Tap to Pay adoption, mobile-first usage, and strong bank participation. But some businesses still haven’t caught up. Below, learn how digital wallets in Australia work, where adoption of them stands, and how to easily integrate them into checkout.

What’s in this article?

• What are digital wallets?
  
• How do digital wallets work across online and in-person payments?
  
• How do digital wallets benefit Australian customers and businesses?
  
• What adoption challenges or limitations still exist?
  
• How can Australian businesses make digital wallets an option at checkout?
  
• How Stripe Payments can help
  

What are digital wallets?

A digital wallet stores your payment cards and credentials in a secure app on your phone, watch, or computer. The wallet holds your card information and generates a secure, one-time-use token to complete each payment. No real card numbers get passed to businesses or stored in their systems.

How do digital wallets work across online and in-person payments?

In-person wallet payments use near-field communication (NFC). A customer unlocks their phone or watch, holds it near the terminal, and the wallet transmits a one-time encrypted token to complete the payment. Because authentication happens on the phone (via passcode or biometrics such as fingerprint or facial recognition), a PIN is often not needed. And if a store accepts contactless cards, it can accept digital wallets with no additional infrastructure.

On websites or in apps, a shopper clicks a wallet button (e.g., Apple Pay, Google Pay) and confirms with biometrics. The wallet passes payment and shipping details in seconds. Many sites now offer QR-based checkout too, which lets customers scan a code on-screen to pay from a wallet on their phone.

How do digital wallets benefit Australian customers and businesses?

Digital wallets change the pace, security, and expectations around payment. That’s the case for both customers and businesses.

Here’s how each group can benefit.

Customers

• Speed and simplicity: Tap to Pay with a phone or watch takes seconds off every in-person transaction. This can be especially helpful on small screens or when multitasking.

• Built-in security: Each payment uses a one-time token, not the actual card number. Combined with biometric authentication, this makes wallet payments harder to compromise. Businesses don’t see or store the real card information, so there’s less exposure if systems are breached.

• Everything in one place: Loyalty programs, travel passes, and event tickets all live in the same tap-ready interface, secured by the device itself.

• Accessibility: Touch-free and mobile-native wallets work well for those using assistive technology. They also reduce physical interaction at checkout, which can help with hygiene and ease of use.

Businesses

• Shorter lines, quicker turnover: Wallet taps process faster than traditional card payments, which keeps checkout lines moving.

• Boosted conversion online: With fewer steps and no typing, customers might be more likely to follow through and come back.

• Lower fraud risk: Wallets verify identity on the customer’s device before the payment even reaches the business. That pre-authentication can help reduce chargebacks and fraud-related losses.

• Meeting customer expectations: Many customers now expect to tap or click their way through checkout. Businesses that support that behavior meet a rising standard.

What adoption challenges or limitations still exist?

Digital wallet usage isn’t evenly distributed. There are important differences between who is paying via digital wallet, where they’re shopping, and how prepared businesses and systems are to support them.

Age-based adoption gaps

As of 2022, nearly two-thirds of Australians between ages 18 and 29 were using mobile payments. Among those 65 and over, adoption was just 9%. That number is rising, but older consumers still rely heavily on cards and cash, so businesses should be prepared to accommodate them.

Incomplete business coverage

Large retailers typically accept wallet payments, but smaller businesses—especially online—lag behind. Many smaller businesses in Australia have yet to adopt new payment technologies or enable Apple Pay or Google Pay in their ecommerce flows, even when their systems support it.

How can Australian businesses make digital wallets an option at checkout?

Customers expect digital wallets for fast, convenient payments.

Here’s how to rise to the challenge:

• Confirm your infrastructure: If you accept contactless cards in person, your point-of-sale (POS) terminal is almost certainly ready. If you’re online, major providers usually support wallets such as Apple Pay and Google Pay ready-to-use, often with a one-click enablement.

• Cover both major platforms: Apple Pay is limited to Apple devices. Google Pay is limited to Android devices. You need to support both, potentially through a payment provider that uses a unified interface, such as Stripe.

• Make wallet options noticeable: Online, place wallet buttons high up in the checkout flow, not buried behind login walls. In person, clear signage can help customers know the option is available, as does training staff to say, “You can tap your card or phone.”

• Monitor usage and stay current: Use continuous feedback to refine the checkout experience. Track what’s coming—new wallet features, QR flows, or Tap to Pay on iPhone and Android could develop more flexible setups over time.

How Stripe Payments can help

Stripe Payments provides a unified, global payments solution that helps any business accept digital wallet payments online, in person, and around the world.

Stripe Payments can help you:

• Optimize your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 100+ payment methods, including more than a dozen digital wallet payment methods, and Link, a wallet built by Stripe.

• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.

• Unify payments in person and online: Easily track and reconcile digital wallet payments across online and in-person channels.

• Improve payments performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorization rates.

• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.

Learn more about how Stripe Payments can power your online and in-person payments, or get started today.