The next wave in payments innovation
Biometrics, in-car payments and even Instagram payments are among the payment innovations that Australians are increasingly willing to embrace.
In a survey of just over 1,000 people in Australia by Worldpay for FIS, the research found that 17 per cent of Australians surveyed are interested in having a microchip implemented in their hands to make payments easier.
Not surprisingly, this was skewered towards the younger generations with 69 percent of Gen Z consumers interested in using biometric authentication to authorise a payment.
According to RFi Group data, four in five Australians are aware of at least one type of biometrics.
RFi Group also found that one in five Australians have used a biometric to access their bank’s internet/mobile or phone banking.
Furthermore, its research found growing comfort levels among people to use biometrics to access their online/mobile banking in the future.
The Worldpay FIS survey also found that 40 per cent of Aussies are using or interested in in-car payment integration services to make payments while driving particularly by generation Z and Y (59 per cent).
The report also revealed that almost a quarter (23 percent) of Australians are already using or are interested in making voice payments.
Convenience was key when it comes to consumers embracing new ways to pay, with 40 percent of Aussies keen to have voice in-car payment solutions to make payments while driving, and this rises to almost 60 percent for Gen Z and Gen Y consumers.
Mobile wallets were also becoming ubiquitous, with over 70 percent of Gen Z respondents either using or interested this payment method will soon reach a tipping point.
The survey assessed the payment behaviours of people across all generations.
With younger cohorts most open to using technology, going forward this will have an impact on driving payment innovation, according to Worlpay
“Australians are usually on the front foot when it comes to adopting emerging payment trends and we have already seen a huge uptake in biometric payment trends like fingerprint sensors and facial recognition technology,” Worldpay Merchant Solutions, FIS, general manager Phil Pomford said.
“This is really just the beginning and we anticipate that further innovations in this area including, voice-activated commerce, will continue to become more widely adopted by the mainstream public,” Pomford added.
The demand and wiliness to take up these innovations – China leads with around 50 per cent of Chinese willing to embrace biometrics – will have implications for both retailers and banks.
“For retailers and merchants to thrive in the future, they need to consider broadening they payment offering in order to appeal to tech-savvy, digitally-driven consumers,” Pomford said.
For banks, collaboration and partnership will remain in order to remain well-postioned in the future of payments.
"Banks have been collaborating with fintechs for quite a while now to offer more useful functions and features to their customers such as money management tools or e-wallet services," he said.
"The banks’ stance towards fintechs has evolved, and they now view fintechs as valuable partners rather than competitors when it comes to improving their offerings and engagement with customers.
"As emerging payment trends begin to gain traction, we can expect more collaboration and tie-ups between banks and fintechs to harness the power of these new payment technologies to navigate changing market demands."
The survey also highlighted an interest in people willing to transact on social media.
Instagram for example is mulling the idea of supporting payments made through posts.
While still showing slow uptake, social media purchases have increased amongst the younger generations.
According to Pomford, this increase demonstrates an expanding opportunity for moving products and services online.
He also acknowledged that trust and privacy issues are of concern when it comes to using social media platforms for payments.
“Data and privacy will always be a concern but once these types of payments including security measures such as biometrics, I suspect that more people will be comfortable using these platforms to make payments,” Pomford said.
In fact, he sees a generational shift at play, within the next two years more people will be using social media to make payments.
The report also acknowledged the emergence of buy now, pay later.
While people were using BNPL for lower amount purchases the survey highlighted that 40 percent of millennials said they are likely to purchase something over $1500 with a BNPL service.
On Monday, ASIC released its report into key findings in BNPL.
According to RFi Group, the report, highlighted the growth and evolution of the industry with new and emerging BNPL providers and models