Aussies are increasingly using their phone to tap and pay at the checkout – but most of us still like to keep a physical card in our back pocket, new research has revealed.

Unsurprisingly, younger generations are leading the charge to go fully digital while older generations are the most likely to hold onto their debit and credit cards.

Money.com.au finance expert Sean Callery said having a physical card in reserve was a “comfort” for most people.

“It’s partly habit and trust, but also about having a back-up when your phone dies or the tap doesn’t work at checkout,” he said.

Money saving expert Joel Gibson agreed that carrying a physical card was like “insurance”, but said there were other practical reasons too.

“Sometimes if I’m going for a surf, I’ll take a physical card in my back pocket rather than leave the phone on the beach,” Gibson said.

“If I’m with my kids, I can give them a card to go and tap to buy something, whereas it’s not so simple to give them my phone, which they need to unlock with my face.”

The survey found that 84 per cent of Baby Boomers, 75 per cent of Gen X, 66 per cent of Millenials and 55 per cent of Gen Z would not give up their debit or credit cards, despite mobile wallets being used for 45 per cent of all card transactions, up from 39 per cent last year.

Based on current growth trends, Money.com.au analysis predicts mobile wallets could account for all retail card payments by 2032 at the earliest.

But Gibson said that was unrealistic.

”It’s a bit like when we talk about cash,” he said.

“As long as cash is in circulation, then a small percentage of transactions will always be cash because there will be some people who prefer it in certain situations.

“I think it’s the same with physical cards.

“I think there will always be some situations where it’s more practical to use a physical card, and that’s why I suspect unless they do away with physical cards altogether, then it’ll always be part of the mix.”

Only three per cent of people surveyed said they still use cash to pay for goods and services.

Gibson said the drive to replace cash was about reducing the costs for business, which he said was a lesson for consumers.

“Businesses are pushing us away from cash because it’s more expensive for them to handle cash transactions than it is to handle digital transactions, as with the digital transactions we tend to pay the fee rather than the business – or it’s shared.

“We can learn from that when it comes to future payment options.

“Business will push us towards whatever is cheapest for them, and that may, if we’re not careful, end up being something that’s not cheapest for us.”

According to both Apple and Google, neither charge additional fees to the merchant or card holder for digital wallet transactions.

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