Payment services have been subjected to significant disruption in recent years. Traditional barriers to entry and enabling new entrants to take on financial services firms by unbundling their product suite and offering superior products and customer experiences. Incumbent payments providers, principally banks, have responded by launching new online payment services. At the same time, new entrants have exploited the prevalence of smartphones to offer their own app-based payment services.

Payments has emerged as one of the key areas of the shift from physical to electronic transactions, as we see an ever-expanding range of payment methods replacing physical cash. From mobile banking and contactless cards, to phone payments and bespoke apps, the payment landscape is undergoing a revolution.

In March 2020, Venture Insights conducted a short survey of 1016 consumers on their current usage of mobile banking and payment apps in Australia. In this report, we discuss the results of the survey and its implications for the payments ecosystem.

Since the survey was taken, social distancing restrictions due to the COVID-19 pandemic have seen contactless payment become more common. This means that the survey results will understate current usage of contactless payment options. When social restrictions are relaxed, we expect a rebound, but not a complete one.  These survey results therefore represent a “floor” of usage and not the new normal of higher usage that we expect to emerge. Nonetheless, they provide some guidance on trends and on how consumers may respond to the contactless imperative.

Contents

Introduction

Trending towards a cashless society

The way we pay – are mobile payments the future?

Australia – cashless first, mobile payments next?

List of charts/tables

Figure 1. Percentage of Cash Payments in Australia by Number of Transactions (projections from 2022)

Figure 2. Do you use your mobile phone to pay for purchases?

Figure 3. Which payment app do you mainly use?

Figure 4. Demographic breakdown of payments app usage – by age

Figure 5. Demographic breakdown of payments app usage – by income