Payment technology is changing, but customers want convenience over novelty

It’s been a time of massive change in payment technologies. From new gadgets to new digital currencies, the technical advances heralded by the internet have finally resulted in an expansion of payment options to consumers.

But consumers themselves don’t really care about the novelty.

That’s the finding of a new report on payment technologies commissioned by HP and conducted by research house RFi.

It surveyed 2000 Australian adults on their commonly used payment methods and attitudes towards a range of new technologies, and found “significant consumer apathy” about the whole issue.

“People are not looking for new devices or channels, but an improved customer experience in order to modify their behaviours,” the research found.

This doesn’t mean consumers aren’t changing their habits. This search for convenience has driven a large change in consumer behaviour in recent years.

RFi has been doing the research at six month intervals since September 2011. Global research director Alex Boorman says the thing that’s surprised him most has been the huge growth in contactless payments through things like Paypass and Paywave.

“The proportion of the population who had made a contactless payment in 2011 was 12%,” he tells SmartCompany. “Now, that’s 40%. And 82% are aware of contactless payments.

“It’s growing quite rapidly. And it’s convenience and availability that are driving it.”

Cash remains the most popular payment method, but it’s giving ground to other methods quite quickly. In 2011, over 85% of respondents said they had used cash to make a payment, but this figure has now declined to below 70%.

Other popular forms of payment were bill payment system BPAY, credit cards, and EFTPOS.

The fastest-growing alternative was bitcoin, though it’s coming off a very low base. Just under 2% of respondents (37 out of the 2000 surveyed) said they had made a payment using the decentralised digital currency in the last 12 months. It was popular among professional men in their late 20s.

PayPal has also been rapidly gaining ground over the past two years – 40% of those surveyed said they used it, compared to under 30% in 2011. “Consumers perceive it as more secure online payment method, and regard it as convenient,” Boorman says.

Asked whether they could consider a scenario within five years where using a mobile phone was the most common method of payment, 25% of respondents said they could.

This suggests consumers are open to changing their behaviour. But there needs to be a solid reason why a new technology is superior to the status quo.

“There has to be some value-add, some other function, like loyalty rewards or something, to get people to shift,” Boorman says.

For small businesses, the willingness of consumers to adapt means retail assistants could soon be freed from the tyranny of the cash register.

“Say you have a market stall – you don’t need a payment terminal now. With a device, you can accept new forms of payment on the go. It may give you access to another type of customer, and help you improve your customer service.”

Stores like David Jones are already doing this – they’re starting to allow their sales staff to process payments from an iPad.


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