Disappearing payments

We used to pay with paper and coins. Well, even cowrie shells. We did it for centuries. Then we started to pay with plastic. But even then, most consumer payments were physical.

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Today, increasingly, they’re not. More and more transactions, where we are actually present, are happening as if we’re not. They’re almost invisible. And the shift is happening more rapidly than ever before.

"“You can see movement towards a cashless economy; a cashless society. That is all supported by mobile wallets." - Bray

ANZ data show a 140 per cent increase in the volume of what are called “mobile wallet” – digital - transactions in the year to December 2018.

Kath Bray, ANZ’s Customer Engagement Lead, says the next expansion of the trend is to give consumers more choice around the actual type of transaction they make with a wallet, notably adding debit cards to mobile wallets.

“We know some customers prefer to press savings when using eftpos (Australia’s point of sale funds transfer system), so we’ve incorporated that within the digital wallet,” Bray told bluenotes, adding consumers tend to rely on a finite number of cards and are relying less on their physical wallets.

Stephen Benton, eftpos Managing Director, agrees. "eftpos research shows payment choice is hugely important to customers and we’re excited ANZ debit cardholders will for the first time have the option to select eftpos to make a transaction from their CHQ or SAV account with Apple Pay".

“We are now developing ways to help customers keep control of their money whilst having access to state-of-the-art functionality, like using their eftpos card on mobile,” said Benton.

According to data from the Reserve Bank of Australia, the value of debit transactions has been climbing for more than five years at almost the same rate the value of charge and credit transactions has been falling.

According to Mike Ebstein, principle of MWE Consulting, “in 2003, debit cards accounted for a 48 per cent share of purchase transactions made with a card in Australia”.

“That has now increased to over 69 per cent and (as can be seen in the following graph), the switch from debit to credit accelerated somewhat over the last 18 months.”

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As more digital payment options become available, customers are rapidly adopting the ease and convenience these new payment options are providing.

“That’s what has us just getting our phone out and using it all the time rather than rummaging around for the wallet or the purse,” says Bray.

“You can see that movement towards a cashless economy; a cashless society. That is all supported by mobile wallets very well.”  

ANZ has extended its Apple Pay offering to allow Access Advantage Visa debit card customers the option to choose cheque or savings accounts via eftpos with Apple Pay. This provides the ability to make purchases and withdraw cash at the checkout of participating merchants when customers choose cheque or savings.

When customers use an ANZ debit card with Apple Pay, the card numbers are not stored on the device, nor on Apple servers. Instead, a unique Device Account Number is assigned, encrypted and securely stored in the Secure Element on the device. Each transaction is authorised with a one-time unique dynamic security code.

Cash, card or Apple Pay, Bray explains consumers are focussing less and less on the method of payment and more on the experience they’re having when making the payment.

“Really the value is in what happens before and after the payment and that's particularly so as the payment task increasingly disappears,” she says. “Think about your Uber experience, your Amazon experience. These are kind of set and forget payments.”

Watch the video above to find out more.

Gemma Simpson is Digital Producer at bluenotes

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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