A mobile-based payments evolution

Australians have adopted wearable technology quicker than in the United States or United Kingdom and have built an international reputation as lovers of gadgets. About 75% of Australians have a smartphone, and nearly half the population has a tablet, according to payments trends research conducted for BPAY.

With that level of mobile connectivity, it could be expected that mobile payments in all categories is on a steep upward trajectory, but that’s not the case, with most people still falling back on the personal computer (PC) or laptop at home to pay bills.

That doesn’t mean we’re not on the cusp of mobile-based payments evolution.

PC stronghold may soon crumble

Annual research undertaken by BPAY shows from 2014 to 2015, mobile internet banking increased by just 5%, while PC, laptop and notebook use dominated, accounting for 81% of transactions in 2015.

The BPAY survey uses a 6-day diary approach to examine bill paying usage and attitudes of over 1000 consumers responsible for their own finances, and with a wide spread of location and gender balance. The survey is conducted over a 6-week period over October/November each year.

The main reasons for PC dominance was ease of use and functionality. So as banking apps improve, newcomers like Apple Pay become more available and an array of new apps and services hit the market once the New Payments Platform goes live in late 2017, it could be expected mobile online payments will enter a sheer usage curve.

Some perceptions may also need to change. Most of us are aware that smartphones leak a lot of information, as nearly any app downloaded wants access to various personal information on a mobile device. But experts say used properly, the mobile device is more secure for online transactions than PC, although a few years ago that was not the case.

Darwin’s theory of bill paying

From a holistic payments perspective, cash is struggling to remain relevant. While the average value of all payment methods captured by the survey respondents over the period is $110, at the bottom of the value table is cash with an average spend of $43.00 a transaction. BPAY remains at the top with the highest average spend of $364.00.

BPAY’s research does show people are adapting how they pay bills, not just by device, but also the time and day of week and frequency of payments.

Gone is the weekend chore of paying the bills. In the past year, weekend days have turned from one of the most popular for bill paying to the least popular, with Tuesday to Thursday currently taking the lead.

Payments are also occurring faster, as billers switch from quarterly or even annual bill periods to monthly or weekly billing. Electronic (BPAY View), emailed and SMS replacement of paper bills is likely also having an impact, as people conduct regular daily banking or email checks. BPAY can reveal 35% of people paid within two to three days of receiving a bill in 2014, but that number rocketed to 50% in 2015.

There has been a response by customers, with more bills being made before the due date. For BPAY 15% of bills are paid on the day a bill is received, up from just 7% the previous year. The bills most likely to be paid immediately relate to entertainment, home (which includes items like utilities, electricity, water, gas, rent or home loans and telephone bills) and finance.

Website dominance yet to be cracked

Not surprisingly, the bulk of purchases are made outside the home, while bill paying is predominantly inside the home.

Of total payments only 6% is made inside the home, but of those payments 72% represent bill and electronic payments. In the mornings we prefer to deal with home, education and health bills.

While 57% of those people solely used internet banking websites, 29% used both apps and websites, although apps are principally used to check bank balances and transfer funds between accounts.

Adapt or be forgotten

For billers there is no time to rest on laurels. Although a number of payment options have strong brand awareness with users, it is more about convenience than loyalty in attracting a user.

When asked what payments respondents had used over the year there was virtually no change in the perceptions of people towards the various types of payments options, with the exception of the Opal and Myki travel cards in Sydney and Melbourne respectively, which showed increases in usage.

What people expect most is a simple and easy payment solution. They want to make payments quickly and trust the payment method. But less than 50% are fussed about a payment method they are familiar with.

However, for the company looking to maximise cash flow, payments utilising BPAY are paid quicker, with the “most days left before due date” of any payment method.

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