Appetite grows for new ways to pay

Kiwis are increasingly opting for debit cards at the cost of credit cards, as new forms of payment begin to take hold.

According to ANZ’S latest financial wellbeing indicator, the percentage of New Zealanders using a debit card increased from 34.9 per cent in December, 2016, to 39.5 per cent in June last year.

Conversely, the use of credit cards fell from 58.4 per cent to 55.3 per cent in the same period.

Ben Kelleher, ANZ’S managing director of personal banking in New Zealand, said that while the appetite for credit appeared to be largely unchanged, ‘‘the way we are doing it is changing’’.

Young people in particular had embraced debit cards to help them stay within their means.

‘‘The good thing about debit cards is you only spend what you have, so they do appeal to people who might be wary of debt.

‘‘If they’re a scheme card – a Visa or Mastercard – then you can effectively use them like a credit card ... The functionality is very similar between debit and credit cards.’’

The bank’s November wellbeing indicator also showed that since Covid, there was a 12 per cent increase in the number of customers who paid off their card in full each month.

In terms of financial resilience, New Zealanders had an average of $42,417 per head in savings as of June last year.

The figure was impacted by people with large amounts of savings. The median figure was $5580 a person, compared to $4810 12 months earlier.

Buy now, pay later schemes such as Afterpay were becoming widespread, and a host of biometric payment tools such as voice authorisation were around the corner.

ANZ itself had nearly 900,000 customers registered for voice biometrics, which was very secure and meant people could skip security questions.

‘‘You could see a future where biometrics in the light of some forms of payment could be useful as well. Maybe that’s with tapping your finger on some sort of terminal – although you may not want to do that in a Covid world – or maybe it’s using voice to pay at a terminal rather than having to use your card.

‘‘Certainly the whole payment space in New Zealand to some degree, but certainly overseas, is moving really fast. I think we can all expect to see a lot of innovation in this space.’’

Convenience was a big driver. A recent survey by global fintech firm FIS found 17 per cent of Australians would even consider putting a microchip in their arm to speed up payments. In China the figure was closer to 49 per cent.

Kelleher thought that was less likely here. ‘‘I think you wouldn’t need to use a chip.’’