The research by Roy Morgan showed that the rapid rise towards a cashless economy is likely to continue, raising the question, the authors say, of whether this represents a threat to traditional banks.
The findings come from the newly released Digital Payment Solutions Currency Report, based on interviews with 50,000 Australian consumers.
Well-established payment services, such as BPAY and Australia Post BillPay, are the most popular choices, the research found, with almost 60% market share. And almost 50% of the population had also used online platforms such as PayPal, Visa Checkout, MasterPass and Western Union Pay in the past year.
But the report stresses these services are now under threat from disrupters, especially the so-called ‘buy-now, pay-later’ services offered by the likes of Afterpay, zipMoney and zipPay. These were used by 7.2% of the country’s population over 14 years old, some 1.5 million consumers.
Other disrupters are the fintechs, which include services like Android Pay, Apple Pay, Samsung Pay, and Google Wallet. These were used by 6.8% of consumers over the last year (1.4 million people). This figure was actually higher than the banks’ own mobile payment offerings, which were used by just 1.2 million people.
The ‘buy-now, pay-later’ offerings are especially popular with Gen Z and Millennials, and their use is well above the 7.2% average – 11.6% of Gen Z used the payment option, and 11.4% of Millennials. Among the older generations this option has gained far less traction – only 0.2% of Pre-Boomers, 1.8% of Baby Boomers had used ‘buy-now, pay-later’. Gen X usage at 6% is only marginally below average.
Females represented almost 10% of all ‘buy-now, pay-later’ users, well ahead of males at just 4.4%.
When it comes to fintechs, the gender profile is reversed, with males representing the majority of users (8.8%) compared to females (5%).
“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,” observed Norman Morris, Industry Communications Director, Roy Morgan.
“Consumers will increasingly want simplified and convenient payment systems, and the industry will need to adapt to these expectations by providing more innovative solutions.”
Sourced from Roy Morgan; additional content by WARC staff