Continued popularity of cash-reducing payment apps and online shopping
In recent years, we have witnessed a strong growth in the use of payment applications and online purchases via smartphones.
This increased preference is broken down in PWC’s Global Consumer Insights Pulse Survey, which found that smartphone shopping is at an all-time high, with 41% of global respondents saying they shop daily or weekly via their mobile or smartphone.
Australia follows the same trend, with 43% of Australians also saying they make daily/weekly purchases via their smartphone.
In addition to the increase in smartphone purchases, significant investments have also been made in online payment technologies over the past year. KPMG’s 2021 FinTech Trends report says the past year has seen “widespread adoption and use of digital and contactless payments,” with many market platforms partnering with financial institutions and financial technologies to provide them.
One example is installment funding apps such as Afterpay. An investment bank like JP Morgan that partners with Volkswagen’s payment platform is another.
In line with the rise of new payment technologies, KPMG also reports “increasing demand for alternative payment models such as buy-it-now and pay-later”.
Apps that cut money and change the way we shop
The large sums of money invested in online payment methods continue to make it easier for online shoppers by providing them with more options. Various payment platforms such as Afterpay as well as Apple, Samsung and Google Pay have made a big difference in the way people even think about shopping.
Online shopping is not only very convenient and time-saving, it has also become very fashionable recently, with apps like Apple Pay or buy-it-now options like Afterpay seeming to get so much attention from media than customers.
Along with these trends, it has been reported that the use of cash is declining. According to Reserve Bank research, cash accounted for 69% of retail payments in 2007 and that percentage fell to just 27% in 2019 and those numbers have continued to decline, especially since the pandemic.
It is clear that over time, consumers are prioritizing new ways of buying and paying and abandoning traditional methods that are less convenient and time-consuming.
Digital payment technology is high on the radar with the Government and the Reserve Bank clearly seeing it as the future of shopping and payment in Australia. Reserve Bank Governor Philip Lowe concluded a recent speech on the subject by saying, “Regulators and government understand this and seek to put in place provisions that encourage innovation and competition and ensure that we have a safe and effective system”.
If you want to learn more about the different ways to pay or the differences between credit cards and buy now pay later, check out this guide.
Or if you’re ready to start paying for things, you can compare these BNPL services.