Kiwis slow to shift to mobile payments

New Zealand’s high use of contactless payments has not led to big take-up in mobile wallets, according to RFi Group research. 

According to the research, 53 per cent of New Zealanders made a purchase using a contactless credit or debit card. However, the adoption of mobile payments remains low. 

“Despite the fact that New Zealand leads the way in terms of contactless payment usage, our research has found that the country is no open to making new mobile payments,” RFi Group research director Amit Khan (pictured) said. 

Speaking at the recent RFi Group Digital Banking Conference in New Zealand, Khan highlighted data that confirmed that New Zealand mobile payments have been slow to gain traction. 

While mobile payment awareness grew from 39 per cent in November 2015 to 56 per cent in November 2016, mobile payment usage only grew from 3 per cent to 8 per cent in the same period. 

“The increase in awareness in the last year was due to Apple Pay’s tie-up with ANZ, however, as the data shows, usage rates have not gained much traction,” Khan said. 

The research revealed a number of factors behind the slow uptake in mobile payments. Firstly, New Zealanders are happy using contactless payments. 

“New Zealanders enjoy the speed and experience in using contactless cards and don’t see any additional benefits in mobile payments.”
 

The London experience 

The second biggest barrier was security. New Zealanders wanted to be re-assured that they were protected against fraud and had data security. 

Merchants were also slow in accepting mobile payments and, according to Khan, this trend was mainly driven by consumer demand. Addressing these barriers to mobile payments will obviously drive mobile payments traction. 

Education will be key in terms of overcoming security issues, noted Khan. Additional benefits which substitute the physical wallet will also encourage the use of mobile payments. 

Preferred features identified by New Zealanders included the ability to store and scan loyalty cards so that consumers can earn points as they shop; receive and store electronic receipts/invoices for any payments made on a mobile phone; store a digital copy of ID cards such as a passport; and the ability to make contactless payments on public transport. 

According to Khan, the ability to use contactless payments on public transport will be key to shifting consumer behavior and he highlighted the experience of London’s transport network, which paved the way for higher adoption of mobile payments. 

In 2014, the network went open-loop, which meant that London commuters could pay to use the transport system using debit and credit cards as well as Apple Pay or Android. 

According to the RFi Group study, this had an big impact on the usage of mobile payments. In 2015, 19 per cent of consumers used mobile wallet payments but in 2016, this had increased to 38 per cent of consumers. 

By adopting mobile payments, Khan said the London transport system gave people a reason to use mobile wallet payments compared with other incumbent forms of payments. 

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