Over the past twelve months many consumers in Australia have become increasingly concerned about using their credit cards for spending given the volatile financial climate, and this has led to many consumers curbing their spending and trying to cut back on debt by focussing on paying off their credit cards rather than spending on them.

However, the Reserve Bank of Australia has recently released figures that suggest consumer confidence in credit card spending has started to increase in Australia, with borrowers having spent significantly more on their plastic in the run up to Christmas. The figures show that in the month of December the level of credit card spending increased by nearly ten and a half percent compared to November.

The increase in credit card spending for the month meant that in December consumers spent just over twenty two billion dollars on their credit cards, whereas in November the figure was just over twenty billion. No doubt the festive season will have contributed to this increase in spending, but the figures also suggest that confidence amongst consumers is returning when it comes to credit card spending.

An official from Moody’s Economy stated: “The severe tightening of belts that consumers were supposedly doing world-wide doesn’t necessarily seem to be witnessed here in Australia. You look at statistics like this and it’s always a cause for concern.” He added that consumers seemed to have taken the RBA’s recent base rate increases in their stride, adding: “Coupled with strong employment growth in January, recent data suggests the RBA can be increasingly confident it can press ahead with its monetary tightening agenda without derailing the recovery in domestic activity.”

Source - SMH.com.au

For most people these days being able to enjoy convenience and ease is of the utmost importance, and this is also true when it comes to methods of payments for purchases. In the past most people used to carry around cash or a cheque book to make payment for purchases but this is a trend that is steadily changing as more and more Australians look towards a cashless society.

Figures that have been recently released have shown that the number of people making cash withdrawals and using cash to make payment for purchases has been falling, and an increasing number of consumers are turning to plastic to pay for their purchases, leading to what is becoming a cashless society. The data comes from MWE Consulting, which showed that there was a fall of over six percent in ATM withdrawals last year.

An official from MWE said: “We have been seeing a reduction in cash transactions on credit (card) for a long time . . . but what is significant is this (debit card) reduction, which accelerated in the last year. I think that’s a sign that Australians are beginning to move away from cash as their staple payment product.” He added that figures showed that “we are finally beginning to move towards a cashless society”.

Another type of up and coming technology that Australians will be moving towards is contactless plastic, where credit and debit cards simply need to be tapped on a reader in order for the transaction to be made.

Source - The Australian

Whilst credit cards provide convenience, ease, and flexibility, hence their popularity amongst Australian consumers, they are also at the centre of concerns relating to fraud. Credit card related fraud has always been something of a problem in Australia and other countries around the world, but according to figures that were recently released the level of credit card fraud in Australia has soared recently.

The figures showed that in the twelve months to the end of June credit card fraud in Australia increased by a massive thirty percent, and this is thought to have been fuelled by an increase in credit card fraud on the Internet, which is known as CNP or Card Not Present fraud. The figures were released by the Australian Payment Clearing Association.

The figures showed that in total the level of fraud in Australia on credit cards, debit cards, and cheques increase from seven cents in every one thousand dollars to nine cents in every one thousand dollars, which reflects an increase of around thirty percent. APCA found that with regards to credit card fraud the transactions were carried out mainly via the Internet.

One industry official said that consumers needed to be extra careful given the figures, and needed to ensure that they were using secure sites, being careful with their card details, and taking out protection where possible. He said: “We encourage consumers to register for fraud protection services when shopping online and activate these additional security controls when prompted.”

Source - Dynamic Business

It has been announced by the credit card giant Visa that from January of next year all new credit cards issued in Australia will be Chip and Pin cards. The company has also announced that it plans to migrate all plastic cards to Chip and Pin by 2013 in a bid to try and reduce credit card fraud in the country.

Visa has set deadlines to meet different goals in order to ensure that all plastic cards are Chip and Pin cards by April of 2013. From January all new credit cards will be Chip and Pin cards, and from early 2011 debit cards and pre-paid plastic cards will be updated. By April of 2012 Merchant POS terminals across Australia will need to accept Chip and Pin cards, and ATM machines are to be updated in 2011.

If all this goes to plan around fourteen million plastic cards, thousands of ATM machines, and half a million POS payment terminals will have migrated in order to phase out signature plastic and reduce fraud through Chip and Pin payments.

Officials believe that migrating credit cards and other plastic cards from signature cards to Chip and Pin cards will help to reduce credit card fraud levels, and this method has proven successful in other countries in terms of some transactions. However, Chip and Pin has led to increased CNP or Card Not Present credit card crime, where the card does not actually have to be present for the transaction to be carried out, such as with online, telephone, and mail order transactions.

Source - Finextra

There is no doubt that over the past year the picture has looked pretty bleak for retailers in Australia and in many other countries, as consumers have had to deal with the double whammy of the global credit crunch and the recession, both of which have had a profoundly negative impact upon their finances and their ability to spend.

However, according to a recent report things may be set to brighten up as Christmas approaches, with a number of factors expected to play a part in increased consumer spending over the festive season. Officials have said that many Australians used the government’s stimulus payments to make an impact on their debts, leaving them with more available cash to put aside, and this has resulted in an increase in consumer confidence. Another contributory factor, according to officials, will be the soaring Australian dollar.

Many retailers are now keeping their fingers crossed for a more lucrative Christmas than had originally been predicted, with many predicting that the increase in consumer confidence will also lead to an increase in consumer spending.

One retail official said: “It’s definitely going to be a better Christmas than last year. Even though there is no economic stimulus this year, there is a much higher level of consumer confidence. And the rising Australian dollar means that the prices of electronic goods and big-ticket imported goods are coming down even as we speak.” He said that retailers would continue to cut prices in order to increase sales, adding: “Retailers will be trying to get more sales, so they cut their prices, but margins will be hurt. And that’s the problem.

Source - The Australian