As e-commerce continues to drive sturdy growth across the globe, Aussie consumers are making the choice to use digital wallets over traditional payment methods. So, is this the end of bank transfers, or is customer behaviour just adapting?
Digital wallets are on their way to becoming one of the most popular ways to pay, says a new study from Worldpay. The Fortune 500 company found that 22 per cent of all retail purchases from Australian customers were made using digital payments. This includes Apple Pay, Google Pay and other digital payments.
For customers across the country, eWallets are now considered the second most popular way to pay, coming after credit and debit cards. Of course, this is expected, as smartphones stay somewhat glued to customers’ sides throughout the day.
The report found that digital wallets are the preferred option when making an online purchase. Electronic goods, fashion and footwear, take the winnings categories for these purchases in Australia, accounting for 26 per cent of mobile purchases. However, credit and debit cards rule supreme for health and beauty products, which made up 25 and 23 per cent, respectively, of all online purchases in the category.
Match Made in Heaven: E-Commerce & Digital Payments
It’s no surprise that digital payments are making waves throughout the country – the growing e-commerce and m-commerce industry allows users to make simple, one-touch payments. This ease of convenience is exactly what Aussie consumers are after, especially if they’re shopping online.
“Much like the rest of the APAC region, Australians are increasingly embracing digital payments, forgoing the more traditional credit-debit card combinations when shopping online, according to our 2019 Retail Global Payments Report,” explained Phil Pomford, General Manager for APAC, Global Enterprise E-Commerce, Merchant Solutions at FIS.
E-commerce sales are rapidly increasing, which offers an invitation for forms of digital payments. From BNPL to Paypal, these eWallets and digital payment options are becoming more prevalent within customer behaviour.
According to the report, bank transfers such as BPAY and POLI account for 60 per cent of all domestic e-commerce volume within Australia. Mobile payments and m-commerce are growing in popularity, the report shows. “Mobile payments currently make up 31 per cent of all retail e-commerce in Australia and are set to grow by up to 15 percentage points over the next four years,” the report noted.
Globally, digital wallets are the most preferred method of payment for M-Commerce, making up 37 per cent of online retail payments, the FIS data showed. “Cash and cards (credit and debit) are still king when it comes to payments at the point-of-sale, both globally and in Australia, accounting for 82 per cent and 90 per cent of all purchases,” the report explained.
E-Commerce is Set to Grow Further
The report also found that Australia has a strong overall growth in e-commerce, and it’s expected to increase to almost USD40 billion by 2022. Moreover, in-store sales are ‘projected to grow at a three per cent compound annual growth rate (CAGR), indicating the health of the retail industry in Australia’, the report found.
According to the Power Retail Spotlight Series on Retailer Apps, the average online shopper has 4.9 retail apps downloaded on their smartphone. Of those users, 50 per cent will utilise the app to check prices and compare products, while 42 per cent of the consumers will use the retail app to make a purchase.
This is a fact supported by the Worldpay report. “On a global level, the data shows that mobile commerce is also growing faster than any other channel, particularly in Asia, where it makes up 81 per cent of e-commerce in China and 60 per cent in Singapore,” the report found.
“In order for Australian retailers and merchants to succeed in the increasingly noisy eCommerce landscape, they need to understand local consumer preferences and offer the right mix of payment methods to meet their expectations. It’s not about offering every available option, but rather focusing on those that best suit your business model and match the needs of your customers,” explained Mr Pomford.
Like this story? Sign-up for the free Pulse Weekly Newsletter for more essential online retail content.