A study by Roy Morgan of over 50,000 Australians has revealed there is now almost universal awareness of digital payment options as Australians continue to move towards a cashless society.
The Roy Morgan ‘Digital Payment Solutions Currency Report’ found 72 per cent of Australians surveyed use at least one digital payment method; with 93.9 per cent saying they are aware of cashless options.
Over the last 12 months, 7.2 per cent of the Australian population over 14 (1.5 million) have used ‘buy now, pay later’ systems such as Afterpay, zipMoney and zipPay. Other newer digital payment systems rising in popularity include Android Pay, Apple Pay, Samsung Pay and Google Wallet which were used by 6.8 per cent (1.4 million) over the last 12 months. This was higher than banks own mobile payments systems used by 5.8 per cent or 1.2 million.
Although the well-established bill payment services (BPAY and Australia Post BillPay) are the market leaders with 59.1%, as well as 43.9% using online payment platforms (PayPal, Visa Checkout, MasterPass and Western Union Pay), the Roy Morgan study suggests the newer systems represent a major challenge to the existing market leaders.
Gen Z and Millennials led the charge when it came to the use of buy now pay later options; with women also favouring the service (9.8 per cent) over their male counterparts. Similarly, Gen Z (10.6 per cent) and Millennials ( 10.4 per cent) use of fintechs far outstrips that of other generations with only 2.2 per cent of Baby Boomers using a fintech service.
Users of the latest technology, as shown by the Roy Morgan Technology Adoption Segments, are the most likely to use fintechs. These ‘technology early adopters’ have a very high 12.4% using fintechs, compared to only 2.4% of those considered to be ‘technophobes’.
Norman Morris, Industry Communications Director, Roy Morgan says Australians are moving away from traditional services towards new ways of making payments,
“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 smartphones 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,” Morris says.
“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.”