Digital and mobile payment systems are taking hold in Australia, with consumers following the lead of their Chinese counterparts and local retailers looking for ways to make it easier for Chinese visitors to spend.
While China has emerged as a world leader in mobile payments, with more than $US12 trillion in mobile transactions recorded last year, Australia and New Zealand’s biggest banks are sharpening their focus on the digital space in response to consumer demand.
Mobile payment systems such as Apple Pay and Google Pay have been rolled out across financial institutions in both Australia and NZ, alongside home-grown digital payment offerings from banks, providing consumers with additional options to use their phones to make transactions.
At the same time, Australian retailers are increasingly taking up digital payment options such as Alipay in an effort to tap into Chinese tourist spending, which reached more than $10 billion in 2017, according to Tourism Research Australia.
ANZ reported earlier this year that mobile payments across its systems had risen by 156 per cent in the first half of the 2018 financial year, compared with the first half of the 2017 fiscal year, with the total spend rising to around $600 million.
Commonwealth Bank of Australia also reported substantial digital transaction momentum, with more than 6 million customers using digital channels, and more than 50 per cent of its total transaction value occurring digitally.
And last month, Bank of New Zealand became the first financial institution in Australia and New Zealand to offer its merchant clients the use of Alipay payment facilities across its Verifone payments platform.
Momentum is also building quickly outside of traditional banking institutions, according to Adyen Australia and New Zealand country manager Michel van Aalten.
Adyen, which recorded global revenue of more than $US1.14 billion ($1.54 billion) and processed $US122 billion in transactions for merchants in 2017, provides merchants with a payments platform which enables consumers to use a range of payment methods, including Mastercard and Visa, alongside Chinese preferred options WeChat Pay, Alipay and Union Pay.
The Adyen platform also enables payments to be made in any country in the world, using one of 150 different currencies.
Mr van Aalten said 35 per cent of Adyen’s Australian customers supported the use of digital wallets, a proportion higher than many other countries.
“Australia has always been quick to adopt new technologies, tap and go payments as an example, and now that more banks and merchants are making these mobile payments accessible, we expect this to continue,” Mr van Aalten said.
“Merchant payments traditionally used to be a banking product, but now the landscape is evolving and it is changing into a technology-first space.
“Consumer expectation and behaviour is changing faster than ever, so it’s up to the payment landscape, companies like Adyen, to ensure that these payment methods that are demanded by the consumer are offered on their platform.”
Mr van Aalten said the shift to mobile payments in Australia was being driven largely by consumers looking for more convenient spending options.
“Just as we’ve seen the decline in cash over the years for payments, I would say digital wallets are almost a natural progression, it’s the next evolution if you will,” he said.
“Consumers have already gone from carrying cash to using a card, now they are using their phone.”
In addition to providing payment methods consumers were demanding, Mr van Aalten said the digital transformation of Australian payments was also giving businesses cross-border expansion opportunities.
“We accept payments for customers in any country, in over 150 currencies, which means that a local Australian business, if they sell cross-border, can accept over 150 currencies from their customers,” he said.
“These payment methods are not restricted to any local entity in China, so it is a huge opportunity for local businesses to sell cross-border into China.”