Slow take-up of mobile payments

More than three out of four Australians between the ages of 18 and 75 own a smartphone and more than half of this cohort have used the device for some form of mobile banking, although adoption of mobile payments is proving much slower.

Deloitte yesterday released the Australian cut of its Mobile Consumer Survey, part of a global analysis of smartphone trends. This is the first time the firm has surveyed Australians and it quizzed 2000 people on their smartphone habits.
 
When it comes to mobile banking, 46 per cent of respondents said they check their balances from a smartphone while 29 per cent transfer money to another individual or make an online purchase from the phone.

However, enthusiasm for mobile payments is yet to materialise as only six per cent of respondents had used their smartphone to make a payment in store, which probably says as much about the penetration of near field communications enabled smartphones as it does about consumer appetite for digital wallets.

This is an international phenomenon. According to the report: "Three years ago analysts forecast the global annual value of transactions via mobile payment apps and enabled by NFC technology would reach US$45-50 billion by 2014. However deployment and uptake has been slower than anticipated with transaction values in 2014 expected to be less than US$10 billion."

The consumer poll was conducted in May this year, before Apple announced its NFC enabled iPhone6 or the launch of Apple Pay. While Apple Pay isn't scheduled to debut in Australia until 2015, and there are lingering supply issues with the iPhone 6, it's likely that appetite for mobile payments will increase next year.

However, Apple still has to win the trust of Australian consumers as a payments facilitator. While Apple remains the most popular smartphone brand in Australia (38 per cent of adults own an Apple, 32 per cent a Samsung with the remaining market carved between a slew of phone makers) only four per cent of consumers said they would like an appstore provider such as Apple or Google to process payments.

That may change. Stuart Johnston, lead partner for technology, media and telecommunications at Deloitte, said that the stability of applications in the appstore was driving adoption and, although there were some limits because Apple operated as a 'walled garden' it was "a very large garden."

To date, however, banks can take comfort from the fact the survey showed they were still preferred as a payments facilitator by 73 per cent.  Other financial institutions such as Visa and MasterCard, and emerging payments providers such as PayPal, were winning the trust of about one in four smartphone users.