Are mobile wallets the future of Australian credit payments?
Almost 80 per cent of Australians have a smartphone, and the entire nation collectively glances at their devices over 440 million times a day1. It's clear from these statistics that this technology is an integral part of our every day lives, and is used by nearly everyone in the country. Despite this, we as nation don't seem interested in adopting the mobile wallet.
We're global leaders in contactless, 'tap and go' payments' at 59 per cent adoption2, so why won't we adopt this next step in payment technology? And what might the implications for our Equifax credit file and financial security be when, or if we do? Lets start by having a closer look at Mobile wallet technology and what it might mean for you in the future.
What exactly is a mobile wallet?
Put simply the term 'mobile wallet' refers to an application on a smartphone or device that enables payment, either online or in person via contactless point of sale technology. With money stored in this wallet on your mobile phone, you can easily purchase goods and services via online shopping or at restaurants, shops or other outlets which have the technology to process such payments.
Only 24 per cent of Australians would use a mobile to pay in a shop like a debit or credit card.
It's an incredibly convenient form of payment that would remove the need to carry around a bundle of cards, or even worse pockets full of change and notes. A switch to this payment type would actually increase security against fraud such as credit card skimming, as instead of a four digit pin thieves would have to get around mobile passwords, or even fingerprint scanners to access your funds.
If this form of payment is so safe and convenient, why then aren't we adopting it en-masse?
Why aren't Australians adopting the mobile wallet?
A recent survey has revealed that only 24 per cent of Australians would use a mobile to pay in a shop like a debit or credit card (a 19 per cent decrease from the year before). This is a surprisingly low number for a nation that is usually ahead of the curve, as the international average is 40 per cent3. The managing director of research firm RSI Alan Shields suggested a reason for our slow adoption:
"It is probably because contactless credit and debit cards have been so successful and the incremental benefits are not enough - or been explained well enough - to make the jump. You would be lucky if you get the right card from the right bank that connects with the right phone at the moment4."
So it seems that perhaps the average Australians opinion of the mobile wallet, and reluctance to use such technology might be influenced by banks and retailers being slow to roll-out the technology. Even if you do manage to find the right mobile wallet and credit card for your needs, most retailers may not be able to support the technology at the point of sale.
What this also means, is that as providers begin to invest more heavily in providing viable mobile wallet technology, its usage amongst consumers should slowly increase until it becomes the norm.
What could it mean for your credit file?
Enable fingerprint scanning, if your phone is able and always password protect payment applications.
Buying things via contactless technology with a tap on your phones screen is a brilliant convenience. So convenient and mindlessly easy that you may lose track of purchases. It's important to remember to make repayments on time each month as missing repayments could damage your Equifax credit score.
Additionally, while mobile payments are in fact safer, it's absolutely essential to use all security measures at your disposal when using them. Enable fingerprint scanning if your phone is able, and always password-protect mobile payment applications.
It's an exciting time for payment technology and if you take the right precautions the future will be safer as well as more convenient.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.
1Deloitte, Mobile consumer survey 2015.
2RFI Intelligence, Aussies are leaders in contactless card payments.
3Deloitte, Mobile consumer Survey 2015.
4ABC News, Tap and Go: Australians embrace contactless credit cards but not mobile wallets.