Many from the financial services industry claim that a majority of banking customers will rely more on mobile banking and payments in the next few years, however in Australia consumers have not yet embraced mobile banking.
The reason for this is mainly due to an ageing population and the wide range of technical barriers in mobile banking.
Banks and card companies are trying to promote the technologies but it is the consumer behaviour that needs to change and pay more using their mobile phones so that mobile payments become the primary mode of payment rather than just an alternative.
The past years, Australian banks like Commonwealth Bank, Westpac, and ANZ have come up with mobile banking apps and hardware to encourage mobile payments. PayPal on the other hand have also partnered with vendors and offer machines that process payments using mobile phones.
According to analysts the success of mobile payments depends heavily on the willingness of consumers to use it for transactions. Especially with an ageing population like Australia where there are fewer younger people who are willing to embrace new technologies in banking.
Demographics are showing that Australians aged 65 and up are rising from 13% in 2007 to about 24% by 2050.
Paypal valued Australia’s mobile payments at $155 million in 2010. However this is just a small percentage of non-cash payments made each day of $220 billion, according to the Reserve Bank.
Over a third of consumers are open to using mobile payments to replace cash purchases. Close to 50% of consumers aged 18-44 are willing to use mobile to pay for purchases while only 23% of those aged 45-80 have the same willingness.
Cash payments still account to 64% of all payments in Australia in 2010 for items under $40 and ATMs and debit cards still account for the majority of transactions that costs between $50 and $500.
- 2010 mobile payments made in Australia: $155 million
- Daily non-cash payments made in Australia: $220 billion
- About 50% of consumers aged 18-44 are willing to use mobile payment technologies
- About 23% of consumers aged 45-80 are willing to use mobile payment technologies
- In 2010, 64% of all payments under $40 are still made in cash
- Australian Demographics: Aged 65 and up in 2007: 13%; by 2050: 24%
Guy Cranswick, Intelligent Business Research Services Adviser: “Payment vendors know that customer behaviour and usage must change for them to succeed, [and] altering behaviour can be difficult and costly.”
IBRS report, Mobile Payments: Market Readiness and User Acceptance: “It must be noted that in a mature ‘banked’ market such as Australia, where the majority of the population have a bank account, habits are locked in.”
Covered by my Visible Banking Team
Will Australian banking customers ever favour mobile payments over cash? How long do you think it will take for Australians to adopt mobile payment technologies to pay for goods and services?
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