New research from BigCommerce and PayPal reveals how Australian shoppers are spending smarter in 2025, with debit cards overtaking credit, BNPL booming, and cart abandonments soaring thanks to hidden fees and clunky checkouts.

The report surveyed over 1,000 shoppers across Australia and New Zealand and found that while discretionary spending is creeping up, people are still watching their wallets. Average order values (AOV) have returned to 2023 levels at $199, suggesting Aussie shoppers are more cautious, more selective, and are placing a sharper focus on value.

Yes, Aussies are still shopping, but they’re fussier than ever about how they pay. Maybe you’ve noticed more customers clicking ‘add to cart’ but never quite making it to checkout? It’s one of the trends revealed in the 2025 Digital Payments Report.

“Today’s consumers are shopping with greater intention, and they expect transparency, trust, and flexibility in how they pay. Checkout is where the sale – and the relationship – can be won or lost,” said Simon Banks, Managing Director of PayPal Australia.

Debit cards an Aussie fave

The humble debit card has officially overtaken credit as Australia’s favourite way to pay online. In 2025, 25 per cent of shoppers used debit cards, compared to 23 per cent using Visa credit cards, representing an 8 per cent drop in credit use over two years. PayPal remains a solid third at 18 per cent, climbing slightly as shoppers lean into trusted and flexible payment options.

The report reveals there is a generational split in how Australians pay. Younger Aussies (18–44) are steering clear of credit altogether, preferring to spend what they actually have. Older generations (45+), on the other hand, still rely on tried-and-true Visa cards and PayPal.

Meanwhile, the report found that 75 per cent of shoppers were more likely to buy from an Aussie website that accepts PayPal, compared to just 16 per cent if it didn’t.

Hidden fees and checkout fails

Want to know what’s sending shoppers running faster than a Boxing Day sale? Surprise costs at checkout.

A whopping 96 per cent of shoppers said they’d abandon their cart if unexpected charges popped up, making hidden fees the top cause of checkout abandonment for three years running.

Add in failed coupon codes (93 per cent will bail) and missing payment options (89 per cent), and you’ve got a perfect storm of frustration. Even something as simple as being forced to make an account or re-enter details can be enough to lose a sale.

Buy Now, Pay Later keeps growing

Love it or hate it, Buy Now, Pay Later (BNPL) isn’t going anywhere. More than one in three shoppers (36 per cent) now use BNPL, up 3 per cent in two years. Afterpay still leads the pack with 83 per cent of users, but PayPal’s Pay in 4 is catching up fast, used by half of all BNPL shoppers, a 20 per cent jump since 2023.

What’s driving the shift? Simple: no late fees. Nearly half of BNPL users (48 per cent) switched to PayPal’s Pay in 4 because it doesn’t sting them with penalties. This is especially appealing for Gen X and Millennials feeling the pinch of the cost of living.

Interestingly, three in four shoppers say they prefer BNPL over credit or debit cards, and almost half use it because they don’t have enough savings for one-off expenses like weddings, birthdays, or moving house.

That said, Aussies aren’t throwing caution to the wind. Only 16 per cent have paid a late fee, and fewer shoppers say they’re looking to cut back on BNPL this year. Those who are cutting back mostly cite saving for essentials or managing debt as their reasons.

High shipping costs are a dealbreaker

While checkout experiences matter, shipping costs remain the number one reason shoppers won’t return. A massive 86 per cent of respondents said expensive delivery turns them off a retailer, followed closely by product quality (77 per cent) and bad customer service (73 per cent).

While a poor checkout ranked further down the list, it still pushed 56 per cent of shoppers to switch retailers, proof that every step of the online journey counts.

So what keeps customers coming back? You guessed it: free delivery (91 per cent), followed by quality products (85 per cent), fast shipping (66 per cent), and easy returns (63 per cent). Flexible payment options encourage repeat shopping for around a third of customers too, not a bad reason to get your BNPL setup sorted.

Cash in on better checkouts

With Aussies spending more carefully and expecting slicker, more transparent experiences, small businesses can’t afford to fail at checkout. Your payment options can make or break the sale.

If you want to put an end to cart abandonment, here’s the cheat sheet:

• Offer a variety of payments: at least debit, PayPal, and one BNPL option.
• Be transparent about costs: Avoid hidden fees by showing all costs upfront.
• Keep your sale simple: Don’t force people to sign up to make a purchase.
• Make shipping fair: Offer free or flat-rate shipping and you’ll win repeat customers.

None of this requires a massive overhaul. Just a few smart tweaks could turn that abandoned cart into a loyal customer.

“In a competitive market, the checkout is no longer the end of the journey – it’s where loyalty begins,” Banks confirms.

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