Contrast that with the myriad ways to pay consumers – digital wallets, peer-to-peer instant payments, and even cryptocurrencies. This rapid evolution requires providers not only to keep pace, but also to anticipate future consumer needs and provide the necessary technology.
“We want to enable merchants to allow customers to use any payment method they wish to purchase goods or services – whether with a digital wallet or QR code or via instant payment.”
Australia is a developed and sophisticated market for payments and consumers have proven to be early adopters of new technologies such as contactless payment and digital wallets.
Australia is number four in the world for payment terminals per capita and the local e-commerce market is expected to approach AUD 100 billion by 2025, according to a research group. GlobalData.
Many of these trends have of course been accelerated by the COVID-19 pandemic. The increasing shift to cashless payments as consumers prefer not to handle banknotes. Or the e-commerce boom as many people flocked to shop online during lockdowns and isolation.
AT ANZ Worldline payment solutions we believe growth will continue as consumers become comfortable buying a wider range of products online and as the systems that underpin e-commerce and payments evolve.
With more and more customers shopping online, merchants’ main goal is to meet their customers’ expectations – to reach them and interact with them regardless of where, when and how they want to shop. .
The retail experience is constantly evolving, for both consumer and merchant. There is a more integrated mix of online and physical channels in people’s shopping habits.
Customers can view something online and choose to pick it up in store. Or they may inspect something in-store before buying it online at a later date. They want that flexibility and merchants need to be able to meet those expectations and provide a solution.
We want to enable merchants to allow customers to use any payment method they want to purchase goods or services – whether that’s with a digital wallet or a QR Code or via instant payment or “buy now, pay later” (BNPL).
Through the use of new technologies, merchants can use new tools such as portals to collect transaction information and data. Once collected, they can use the analytics to provide better service and manage additional offers such as loyalty programs.
Emerging technology may also include contactless phone payments where small businesses won’t need a terminal. They will be able to accept payment from a customer by touching their phone to the merchant’s phone, which uses software to act as a terminal.
Later this year, a number of existing ANZ customers will be invited to test such an app called Worldline Mobile Pay, which allows merchants to turn select Android smartphones or tablets into a payment terminal.
Other services slated for introduction next year include a new terminal called YUMi – which includes self-checkouts, BNPL and loyalty programs in one place – and Omnichannel which allows consumers to switch between points online and in-store contacts in a single purchase.
Overseas markets often predict trends that may soon be happening in Australia. Before moving to Australia recently, my most recent experience was working for Worldline in the Central and Eastern Europe region (which includes countries such as Poland, the Czech Republic and Hungary).
Unlike Australia, the payments landscape in Europe is rather mixed. While some countries in the Nordic region are rapidly moving towards being cashless, cash usage remains relatively high in some Eastern European countries.
In Australia, cash usage has plummeted while contactless transactions and digital wallets have surged. Data from ANZ shows contactless transaction volume grew by 10.2% in 2021 compared to 2020, driven by a 15.8% increase in debit card spending over the same period.
Adopt real-time payments
We also expect to see much higher use of instant payments, including strong growth in peer-to-peer (P2P) transactions where you can pay directly between accounts.
Australia’s fast payment system, the New Payments Platform (NPP), was launched in 2018 and enables real-time payments between consumers and businesses around the clock.
The service is growing in popularity and now accounts for more than a fifth of total account-to-account payments, according to the Reserve Bank of Australia. Data.
These payments are already popular with young people and we expect the trend to become mainstream as the technology becomes better understood. This will likely reflect adoption of contactless payments and digital wallets.
BNPL continues to grow and evolve and we have already seen it move from big ticket items such as furniture or appliances to smaller purchases.
BNPL represents a small but growing share of payments in the Australian economy. BNPL suppliers processed around A$11.5 billion in purchases in the year to June 2021, according to RBA data.
Although the sector faces increased regulatory scrutiny, we expect its use to continue to grow and the ability to accept BNPL payments to be important for merchants and businesses.
We could see even more diverse payment options emerge, including QR code payments, link payment, or even cryptocurrencies hitting the market.
Like all new technologies, some will take hold and gain popularity while others will fall through the cracks. For example, Worldline can accept cryptocurrencies in some European markets, but adoption so far has been relatively low.
The future of partnership
These new market dynamics underscore the value of partnerships in an increasingly competitive environment between neobanks, fintechs and big tech companies. The business model is changing for many banks around the world.
While payment services are always essential, an effective way to drive the next stage of growth is to partner with a specialist payments player. Many banks and financial institutions in Europe have chosen this approach – Worldline has signed partnership agreements in three European countries last year (Greece, Italy, Sweden).
It can make sense for a bank to partner up to deliver new technology without having to develop the hardware and software itself. Conversely, it may make sense for payment companies to partner with a bank, rather than starting from scratch in a new market.
This opens up many other avenues for cooperation, such as better online merchant integration, specialized merchant lending, and better use and analysis of collected data.