22 Jan 2019
Digital payments have recently increased in popularity, and the trend does not seem to be coming to an end anytime soon – with Australia leading the world in contactless payments and the usage of mobile payments surging.
The Australian Payments Council (APC) is exploring the future of payments in the digital economy, while inviting businesses, NGOs, the government and consumers to comment through the APC website on what they believe is needed to advance further in the sector.
“We are renewing our strategic vision for the payments system and are looking for views on how we can collaborate to navigate the rapidly changing landscape,” said Robert Milliner, chairman of the APC.
The APC first developed the Australian Payments Plan in 2015, in an effort to expand in areas such as the changing payments mix, open data and digital identity.
Since then, the transition towards complete utilisation of digital payments “accelerated as Australia’s economy has become more digital and global”. Cheque numbers have fallen by 47%, dropping to 80 million in 2018, and now one in five people do not carry cash around.
On the other hand, card payments have increased by over 40% in the same timeframe, reaching 8.8 billion transactions in 2018.
The Roy Morgan ‘Digital payment Solutions Currency Report’ revealed that of all generations, Gen Z is the most adept and accustomed to contactless payments and fintech services. Fintech apps include Android Pay, Apple Pay, Samsung Pay and Google Wallet. Males are also proven to make much greater use of fintech than women.
Norman Morris, industry communications director at Roy Morgan, says: “Australians are moving rapidly towards new ways of making payments, changing from the traditional dominance of the major banks to using new entrants such as technology companies (fintechs) and the new innovative start-ups such as Afterpay with their highly successful ‘buy now, pay later’.
“As the users of the new payment technologies move from the domain of the ‘technology early adopters’ through to ‘professional technology mainstream’ and other segments, they are likely to become more universal. The increasing use of new payment technologies is being aided by the growing proliferation and development of smart phones and wearables with integrated technology such as Apple Pay and Google Pay, and an increasing number of financial institutions enabling their customers to make payments with these devices.
“All these changes pose a threat to traditional payment types such as credit cards and cash as consumers in effect can access small amounts of credit instantly. Consumers will increasingly want simplified and convenient payment systems and the industry will need to adapt to these expectations by providing more innovative solutions. Traditional financial institutions may need to collaborate with Fintechs and other third parties to keep up with the rapidly changing digital payment environment.”