New report explores benefits and challenges of digital transactions


A new UNSW Canberra Cyber report has quantified the security, challenges and opportunities of online payments in Australia – one of the biggest digital disruptions of the last 20 years.

The digital revolution had fundamentally changed the way we live our lives and how we shop. In the last two decades the number of Australians online has increased by almost 16 million people.

Director of UNSW Canberra Cyber Nigel Phair believes that while Australian online retail sales are only equivalent to about 9 per cent of traditional retail sales, online payments are a massive enabler for the economy and decrease transactional fraud.

“Australians love technology and enjoy using it to make safe, secure and convenient online transactions,” Mr Phair said.

“Innovation in payments from new technology and players has altered the retail payments landscape. This is a good thing for businesses and consumers, however as much as we embrace innovation, the non-negotiable element which will drive adoption – and therefore economic growth – is customer trust and safety.”

With 97 per cent of Australian small businesses connected to the internet and 67 per cent of those accepting orders online the reliability of electronic payment services has become critical to the smooth functioning of our economy.

“For companies that accept online payments, a breach of confidential customer data is among the most serious risks they face. Failure to protect data leads to financial costs, customer defections, loss of reputation and possible sanction, depending on the jurisdiction,” Mr Phair said.

He said the good news is Australia is leading the way with payment security measures.  Even with increased use, the innovation from the sector has reduced fraudulent payment activity, particularly in online payments, where a card is not physically presented to a merchant.  Interestingly, payment card fraud has declined as spending by card has increased (not accounting for COVID-19).

Card-Not-Present transactions in Australia grew by 16% in 2019 to $220 billion. Over the same period, CNP fraud on Australian cards dropped by almost 18% to $403 million – representing less than 0.2% of transactions.

“This innovation extends to the development of security features through ‘security-by-design’ – the concept of taking a more proactive approach to payment security, baking security into a merchant’s payment infrastructure and not simply relying on reactive third-party security tools,” Mr Phair said.

The UNSW Canberra Cyber report Online Payments – The Future of the Australian Economy is available for download.