The report is in contrast to recent Reserve Bank data which shows cash remains the primary payment method for Australian consumers.

Banking research firm East & Partners reported 28.9 per cent of all merchant sales in the past six months were paid with a debit card -- a 24 per cent increase.

There was also an increase in the use of debit Visa and MasterCard cards (called Scheme Debit cards), which permit holders to use their debit account for online purchases and offer the same acceptance as credit cards.

Financial markets analyst Zoran Knezevic suggested rising unemployment and a poor global economy contributed to a ‘debt averse’ market. The pattern is also emerging in other countries such as the U.K., where debit cards are already the most popular form of payment.

In addition to the emergence of Scheme Debit cards, analysts suggest the move toward debit can be partly attributed to the additional fees consumers face for using a credit card, including interest, annual fees, transaction fees and merchant surcharges.

Reserve bank data shows merchant surcharges for credit card payments are increasing, with Visa and MaterCard merchant fees accounting for 0.88 per cent of the purchase price and American Express and Diners Club for 2.01 and 2.07 per cent respectively.

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