Q&A: payments, charity & loose change

Australia is quickly progressing toward a cashless society as more people embrace contactless and mobile payment solutions.

" For customers who have tried mobile payments, ongoing usage rates in Australia are among the highest in the world." Bob Belan, Managing Director Products, ANZ.

That’s the view of ANZ’s Managing Director Products Bob Belan, who says Australia is following in the footsteps of nations like Sweden, where barely 2 per cent of all transactions are made using cash.

The benefits of this transition are obvious but so are the challenges. While ‘tap and go’ is convenient for consumers and merchants, there’s evidence it is hurting not-for-profit organisations. Indeed, some UK-based charities have reported a 50 per cent drop in cash donations, forcing them to look for an alternative to the traditional tin-rattlers on the street.

It’s a situation likely to get worse. A recent East & Partners report predicts cash payments in Australia will fall to just 5 per cent by 2019.

“New technologies like ‘click to pay’ in-app or electronic invoices and the New Payments Platform which offers real time payment capability will accelerate the shift away from cash transactions,” Belan says.

What does it mean for the outlook for charities and similar philanthropic groups? 

Tapping for good

That’s where organisations like Shout For Good come in. ANZ's Shout is partnering with charities such as FightMND and Cancer Council, giving fundraisers and volunteers mobile devices which enable people to donate and buy merchandise in seconds by tapping their card, phone or watch.

“We’re really excited to help solve this problem our charity partners are experiencing around traditional cash fundraising,” Charlie Carpinteri, CEO of Shout For Good says.

“We know we won’t be replacing cash donations any time soon – so right now I see Shout on ANZ BladePay supplementing existing cash fundraising efforts, not replacing them.

“But eventually, as ‘tap to donate’ technology gains acceptance, I see (products like) ANZ BladePay as a real game changer in the not-for-profit sector.”

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In the wake of the recent Big Freeze 3 event in Melbourne, bluenotes sat down with Belan and Carpinteri to talk about what’s next for payments – particularly with tech giants like Apple and Google eyeing the lucrative global payments market.

White: What trends are we seeing in mobile payments?

Belan:  Australians have traditionally been early adopters of new payments technologies and have led the world in the adoption of contactless payments.

It’s expected this trend will continue and certainly the right conditions exist in this market for mobile payments to be embraced. 

Around 90 per cent of Australia’s adult population carry a smartphone and 65 per cent have a device already capable of adopting mobile payments such as Apple Pay, Android Pay or Samsung Pay.

Awareness of these services has increased sharply. For customers who have tried mobile payments ongoing usage rates in the Australian market are among the highest in the world but broad-based adoption is critical to its proliferation.

This penetration is reminiscent of the market’s experience with contactless card payments, where early adoption reached a tipping point when the major retailers embraced contactless payments, around two years from initial launch.

White: What are some of the new ways for people to pay?

Belan: We’re seeing an increasing prevalence of mobile wallet utilisation, shifting more transactions away from physical plastics to smart phones. Wallets are also the key entry point into the broader world of payments for tech giants like Apple and Google.

We’re also seeing rapid growth in payments through social media apps like Facebook and Messenger, allowing customers to make payments without needing to leave their social platform of choice.

Outside Australia we see the rise of alternative payment methods, some of which have already achieved huge scale in their own markets, like Alipay and Wechatpay in China and PayTM in India.

These provide alternative ways to pay which fall outside the traditional bank payment processing systems but offer simplicity and convenience for customers.

White: What was Shout’s involvement in the Big Freeze 3 event to help find a cure for motor neurone disease (MND)?

Carpinteri: Shout partnered with FightMND, the foundation behind the Big Freeze 3 event to provide donation processing for their website, an SMS service for donations via SMS, and also our new Shout Blade product, which utilises ANZ BladePay.

For the first time Shout was able to facilitate both merchandise and donations in one secure transaction. We had around 100 Shout Blade devices at Federation Square and the MCG, allowing people to buy Big Freeze 3 beanies and donate with a tap of their card, phone or watch. It was an amazing experience and we were very proud to be part of it.

White: What was the reaction from the public?

Carpinteri: The response has been fantastic for both the donor and the operator of Shout Blade. This was important for us as we wanted to build a product which was super easy to use and didn’t require specific training.

Throughout user testing we’ve been optimising the customer experience and will continue to do that as we get more feedback. We didn’t want to build just another point-of-sale device or app - we wanted Shout Blade to be purpose built for fundraising.

White: The rise of cashless payments such as Apple Pay can make it difficult for charities which rely on the traditional street tin rattling. How can mobile devices help?

Carpinteri:
 Eventually, as ‘tap-to-donate’ technology gains acceptance, I see (technologies like) ANZ BladePay as a real game changer in the not for profit (NFP) sector. Shout is committed to continuing to develop Shout Blade.

There are so many applications in the fundraising space. Another great one is event registration – imagine being able to register and pay for your entry using one portable device.

White: In the UK, a cashless giving trial found people donated three times as much when asked to pay with their card. Are you seeing the same in Australia?

Carpinteri:
 It’s a bit early to say as we don’t have a lot of data but it does make sense. Being able to ‘tap-to-donate’ is so convenient.

Through data we will be able to continue to build a product which really helps charities traverse the change in how we use and give our money.

Shane White is senior production editor at ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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