More than 70 per cent of Australians now use at least one digital payment method, according to Roy Morgan research.
Awareness among Australians of digital payments is now an “almost universal” 93.9 per cent, says Roy Morgan. Even more significantly, 72.4 per cent use at least one digital payment method over an average 12-month period.
These results comes from the newly released Roy Morgan ‘Digital Payment Solutions Currency Report’ November 2018.
‘Buy now, pay later’ and ‘fintechs’ (financial technologies)
Over the past 12 months, 7.2 per cent of the Australian population over 14 years (1.5 million people) have used ‘buy now, pay later’ systems, such as Afterpay, zipMoney and zipPay.
Other newer digital payment systems outside the major banks are the ‘fintechs’. These include Android Pay, Apple Pay, Samsung Pay and Google Wallet. According to the report, 6.8 per cent (1.4 million people) of Australians used these over the past 12 months. This was higher than the banks’ own mobile payments systems (5.8 per cent, or 1.2 million people).
The well-established bill-payment services, BPAY and Australia Post BillPay, are still the market leaders, with 59.1 per cent of consumers. And 43.9 per cent use the online payment platforms PayPal, Visa Checkout, MasterPass and Western Union Pay.
Nevertheless, the newer systems represent a major challenge to these systems.
Gen Z and millenials lead in ‘buy now, pay later’
Use of ‘buy now, pay later’ is well above average (7.2 per cent) for gen Z (11.6 per cent) and millennial consumers (11.4 per cent).
But older generations make very little use of it. The percentages are pre-baby-boomers (0.2 per cent), baby boomers (1.8 per cent) and gen X (six per cent).
Fintechs favoured by younger generations
Gen Z (10.6 per cent) and millennials (10.4 per cent) are the greatest users of fintechs. By contrast, only 0.6 per cent of pre-baby-boomers and 2.2 per cent of baby boomers use them.
Another fault line is sex. Although more women use ‘buy now, pay later’, more men use fintechs (8.8 per cent versus five per cent).
‘Industry will need to adapt’
Industry Communications Director at Roy Morgan Norman Morris said: “Australians are moving rapidly towards new ways of making payments.
“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.
“All these changes pose a threat to traditional payment types such as credit cards and cash. Consumers will increasingly want simplified and convenient payment systems. 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.”