It’s hard to keep track of how Aussie consumers want to pay – a new report shows we’re utilising more payment methods than ever before.
The latest Australian Payments Research report from HP and RFi found consumers are using an average of four different payment methods in a month.
Cash remains the most popular method of payment as of September 2013, but overall the proportion of consumers using cash in an average month has dropped from almost 90 per cent to just 70 per cent in the past year.
While mobile has long been touted as an emerging payment channel, it hasn’t quite had the take-up expected in Australia. Contactless payments however have grown exponentially since the introduction of contactless terminals in Coles and Woolworths chains.
The choice of payment method is often driven by purchase value. The report found that three quarters of consumers prefer cash for lower value transactions such as a coffee or newspaper, citing speed as the main reason. Though a contributing factor for this can be the fact that many cafes and newsagents have surcharges for card purchases under $10.
The research also found that the spread of contactless payments is starting to have an effect on payment choice. The majority of contactless card users stated that their most recent contactless payment was for a purchase below $50, showing some cardholders are switching from cash to contactless for low value payments.
Usage of the online payment service PayPal has also grown for the fourth consecutive survey, with almost 50 per cent of consumers aged 34 or below using it in a typical month. The report found that consumers see PayPal as trustworthy because they don’t need to enter credit card information for each purchase.
Other key findings:
- Rewards points are one of the key factors driving payment choice for consumers using their credit card more than any other payment method.
- Consumers aged 25 to 34 are most likely to be driven by the speed of a transaction being reflected in their account when making a purchase.
- In the year to September 2013, the proportion of consumers owning contactless cards increased from 38 per cent to 57 per cent.
- While the number of consumers owning a smartphone increased to 68 per cent, just 23 per cent of smartphone owners can envisage a future for mobile phone payments.
- The proportion of online shoppers increased across all age groups. Unsurprisingly, consumers aged 18-24 are most likely to spend online, with 90 per cent stating they had made an online payment in the last 12 months.