Mobile payment technology could swipe out the use of traditional wallets in eight years, a Commonwealth Bank survey finds.
After surveying 1024 Australians the bank forecasts that paying with cash or cards could give way to mobile phones by 2021, according to a report in the Australian Financial Review.
Commonwealth Bank executive general manager of cards, payments, analytics and retail strategy, Angus Sullivan, told the AFR he thinks a digital or e-wallet will become an important part in people’s lives.
“We’re reaching almost to the point of ubiquity around smartphones so I think that’s one big driver,” he said.
“You’re also seeing more convergence around technology solutions – the wide scale rollout of contactless terminals in Australia has been a really big tipping point.”
The AFR reports that mobile phone payments are growing by around 58.5% a year.
Kounta founder and chief executive Nick Cloete says he thinks the prediction of 2021 is too cautious and that change will likely happen much sooner.
“I most definitely agree with the findings but I’d bring that date forward,” he told SmartCompany.
“Most countries like Australia now have such a high mobile phone penetration… Because the future of technology is moving so fast, consumers are demanding that they want to do everything on their phone.”
Cloete says with the payment technology his business creates, many businesses are already using it to offer mobile phone payment to customers, but a challenge is building customer awareness in order to increase uptake.
He explains that a typical mobile payment works with a customer logging into a payment App on their phone, choosing the business they are in, and allowing it to connect to the retailer’s computer system.
“The future of retail online and the future of online is mobile,” he says.
However, while Cloete and the Commonwealth Bank are confident about consumer uptake, late last year Reserve Bank of Australia governor Glenn Stevens told an Australian Payments Clearing Association conference that elements of Australia’s payments infrastructure are “a bit dated”.
“It is very clear that both individuals and businesses are demanding greater immediacy and greater accessibility in all facets of their day-to-day activities,” Stevens said.
“This includes payments.”
The results of Accenture’s Consumer Mobile Payments survey from 2013 found that many consumers know that mobile payments are an option, but still do not make them.
Once consumers had made a mobile payments, they were much more likely to become converts.
Incentives from retailers or businesses also helped take-up rates. Accenture found 60% of consumers who already make mobile payments said they would probably do so more often if they received instant coupons as a result.
It also found that 36% said they would hand over personal information in exchange for such rewards, while 46% of users indicated that they would increase payments if offered short-term location-based coupons.
Security concerns were found to hold back consumers from taking up mobile phone payments more rapidly.
“While the industry is pre-occupied with the technology roll out, consumers are much more concerned about the security, privacy, convenience and value of using their phones to make payments,” Accenture reported.