Forty per cent of all face-to-face Visa transactions in Australia are now made using Visa payWave, our contactless technology. With this infrastructure for contactless payments already in place, the jump to mobile payments will happen quickly.
In the next 12 months, I expect to see cloud-based mobile payments take off in the Australian market too.
In many ways it’s impossible to predict exactly what the financial landscape will look like in the future, especially in the rapidly evolving world of payments.
David Murray, the chairman of Financial System Inquiry noted recently technology is one of the major themes of the 270 odd submissions made to the inquiry.
That speed of innovation means it’s crucial for the FSI to recommend changes that give the financial system ample room to adapt to future developments - both predicted and unforeseen.
Here at Visa, we are calling for three main changes, all of which support what we believe is future-proofing our industry in Australia.
Payments innovation is being driven in large part by consumer choice. Consumers want faster, more convenient transactions, which new form factors like contactless cards and mobile payments give them.
A survey on Visa payWave usage revealed one in two customers choose to use contactless due to its speed and 83 per cent of customers said they were satisfied with the convenience of contactless transactions.
Australians are also carrying less cash, with one in four consumers carrying less than $20. The RBA’s recent research on payments behaviour shows use of cash is declining across all demographic groups, which the RBA says could be in part because new payment technology can match or surpass the speed of paying with cash.
It’s time for regulation that supports evolving consumer behaviour because we’re in a time of change and there will always be new ways to pay.
It’s not just payments that are looking to be future-proofed. If you look at the submissions of industry bodies like the Australian Bankers Association (ABA) or Australian Retailers Association (ARA), you will see these organisations calling for regulation to be open and plan for the future.
The ABA emphasises the importance of getting cloud computing regulation right as banks increasingly look to adopt ‘as-a-service’ models. The ARA also talks about the ability to adapt to future innovation, urging the FSI to take into account the need for merchants to upgrade their technology platforms with cost effective solutions.
It’s clear that any new regulation addressing technology will impact us all, from small independent merchants to the largest financial institutions. As the industry awaits the FSI interim report in mid-July, it’s reasonable to predict technology and innovation will be a significant component of the findings.
What will ensure the continued success of Australia’s financial system is making sure the recommendations put in place today are equally conscious of what will come tomorrow.
Stephen Karpin, Group Country Manager, Visa Australia, New Zealand & South Pacific.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.