The Rise of Contactless Payments in Australia
- Card payments increased to 10.5 billion in 2019 from 6.6 billion in 2015 and is expected to reach 14.9 billion in 2023 (mobiletransaction.org)
- 73% of Australians believe their smartphone may replace their wallet by 2021 (extranet.apca.com.au)
- 22% keep zero cash in their wallets during a typical week (rba.gov.au)
- 10.8% use mobile payment services like Apple Pay and Google Pay (*2018-2020 data) up 7.1% from the previous year (mobiletransaction.org)
- 51% plan to use less cash in the future while 21% say contactless credit card payments are their preferred payment method (mozo.com.au)
- Australia is one of the world’s leading countries when it comes to contactless payments made via debit and credit card with 60% of all MasterCard and Visa debit card transactions being contactless payment transactions (mobiletransaction.org)
- 71% of Aussies believe contactless payments are here to stay while 6 out of 10 global respondents think digital payments will become a permanent part of everyday life (mozo.com.au)
The Benefits of Contactless Payments
It’s not surprising that Aussies have embraced contactless given the practical benefits of this payment method:
- Convenience – Convenience is king and consumers have taken to contactless payments due to ease of use. With tap-and-go payments, for instance, Aussies no longer have to hand their cards to cashiers or sign receipts for faster checkout. The payments industry temporarily increased the PIN limit for contactless cards to $200 to help shoppers limit physical contact at payment terminals.
- Security – Going contactless also means that your card never leaves your hand at the payment terminal and you are not required to enter your PIN, which reduces the risk of card loss and fraud. Further contactless technology prevents accidental or double payments even when you touch the card reader twice. This is due to encryption that is unique to each purchase and which protects transaction data.
- Rewards and savings – Using contactless cards gives consumers access to reward points, loyalty programs, discounts, promos and other exclusive offers depending on their card provider and participating merchants.
Why Businesses Should Offer Contactless Payments
Most Australian businesses accept some form of contactless payment. But if you have yet to add contactless payment options to your shop, here are some reasons to do so:
- Ease of payment – Tap and go payments provide added convenience and faster processing times for consumers. With no PIN required for transactions under $200, checkout is quicker, cleaner and much more pleasant overall.
- Decreased cart abandonment – Many consumers will abandon their purchases upon seeing a lengthy checkout queue or standing in line for longer than they’d anticipated. Contactless payments can reduce the incidence of cart abandonment by streamlining and expediting the payment process to keep consumers happy and help you generate more revenue.
- Expanded reach – Consumers in the 18 to 36 age bracket make up 26% of the population and are avid users of contactless cards, digital wallets and other financial tools. Contactless mobile device payments has also increased in frequency among Aussies under 40, with about 1 in 5 people in this age bracket reporting at least one contactless mobile payment during the week (mobiletransaction.org). You can appeal to this age group by offering contactless payment options.
- Consumer interest and demand – Surveys have found that average order sizes increased 2.4% while transaction frequency increased 23% on average soon after consumers adopted mobile wallets. 67% of adult smartphone users also expressed interest in owning a mobile loyalty card and 77% wanted to have expired coupons updated to new offers on their mobiles (mytotalretail.com).
- Cost and time savings – Accepting cash payments comes with risks and costs. For instance, cash needs to be continually stored, guarded, transported, and accounted for despite the constant threats of theft, burglary or property loss. Accepting digital payments removes or at least lessens those challenges. Further contactless payments can help businesses like quick-service restaurants, convenience stores and supermarkets save money just by shortening the amount of time sales associates spend checking out each customer.
How to Add a Contactless Payment Option to Your Business
Determine your goals – What do you hope to achieve by adding contactless payments? Being clear about your goals will help you determine whether the addition will be worthwhile especially if you’ll need to invest in new equipment. It will also help you identify the right contactless solution for your business.
For example, if you want to cut down transaction time for a quick-service restaurant or convenience store, rapid tap and go might be your best option.
Text-based payments, on the other hand, might be a better contactless option for furniture shops, dental clinics and other appointment-based businesses as it lessens the amount of time you spend going back and forth with a customer. This allows customers to make payments before, during or after their appointments, spelling convenience for customers and business owners alike.
Review existing payment processes – Most businesses have their own payment procedures in place. When adding contactless options to your shop, it’s important to evaluate how existing payment processes serve your business. Identify any sources of friction and make the necessary tweaks before adding contactless payments for maximum customer satisfaction.
Assess current software and hardware – Most business owners will have access to the hardware they need to add contactless payments as long as they have an upgraded Point of Sale (POS) system. If you haven’t upgraded your shop’s technology in a long time, you might need newer equipment. You can also look into integrated terminals with add-on readers that can be plugged into an existing POS terminal.
Train staff – Your staff must be on-board with adding new technology and streamlining business processes to ensure success. Give them sufficient training to help them improve the checkout process and provide better service.
Tell customers – Most customers expect shops to take cash and credit, but if you’re only recently adding contactless payments, you’ll need to inform new and existing customers of the contactless solutions that your business now offers. Display the universal contactless symbol at your checkout, POS terminal, shop window or front door to encourage customers to take advantage of your contactless options for an improved shopping experience.