Hang ups over paying by phone

Australians are not keen to pay by phone – but there are plenty of other options, writes Tim McIntyre

SMARTPHONE payments and cardless cash withdrawals have been slow to take off in Australia, with a survey showing consumers are unconvinced when it comes to convenience and security.

Research by finder.com.au found 72 per cent of more than 2000 surveyed have never used their smartphone to make a payment, while of the 28 per cent who had, most had only used apps such as Apple Pay 2018 COMMONWEALTH GAMES HOST CITY and Android Pay for purchases between $20 and $100.

Only 7 per cent had spent more than $100 on a mobile phone transaction.

Finder.com.au spokeswoman Bessie Hassan put the slow uptake down to people not seeing the point.

“It’s a solution to a problem that doesn’t exist,” Ms Hassan said. “Current payment systems are very entrenched … The widespread popularity of contactless ‘tap and go’ payments means Aussies aren’t rushing to change their buyer behaviour.”

Indeed, the research found 43 per cent were not using mobile payments because they were happy using cards or cash and a further 29 per cent either saw no benefit or did not trust the security of mobile phone transaction technology.

Meanwhile, a separate Finder.com.au study found 88 per cent of Australians had never used cardless cash withdrawals at an ATM – where customers are given a unique code to withdraw cash using their smartphone.

Around 27 per cent had never heard of the feature, 23 per cent were worried about security and 45 per cent had just not bothered using it.

Interestingly, Ms Hassan said phone withdrawals were actually more secure, as they took card-based fraud out of play.

“It avoids having the card details intercepted by a skimming machine,” she said. “Skimming fraud in Australia dropped 10 per cent in 2015 to $22.9 million, down from $25.4 million in 2014.” RBA data showed cash withdrawals are on the decline, dropping 7.4 per cent in the 12 months to September 2016, from the previous year. Ms Hassan said there were advantages to contactless financial technology. “In emergencies you can continue to access your cash even if you’ve left your wallet at home,” she said. While confidence is low, major banks are experiencing an increased uptake of cardless cash withdrawals.

Commonwealth Bank reports total cardless cash transactions since June 2014 rose from 5.3 million in December 2015 to 12.6 million one year later, while tap and pay transactions were up to 3.3 million per quarter, almost tripling over 18 months.

Westpac has seen a 19.21 per cent increase in the number of transactions over the past six months, but a representative of the bank said tap and pay was still the most popular option, adding that the bank was trialling wearable devices, which it hoped to offer by year’s end.