ACSM
Australia’s mobile wallet adoption surge creates new opportunities and challenges for merchants By Ralph Kooi, Australia’s Country Manager at ClearSale
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ustralia was already a leading market for cashless payments and digital wallets before the pandemic struck. Now, the need for contactless and convenient payments has accelerated the mobile wallet use trend dramatically. This shift in consumer behaviour creates new options for merchants to improve their customer experience, build loyalty and increase the average lifetime value of their customers. However, payments that go through a digital wallet provider also present a unique set of fraud-control challenges. Managing those risks will be the key to unlocking the most value from the opportunities that Australia’s mobile payments shift offers. What’s driving the shift to mobile wallets over cards? For in-person transactions, a digital wallet’s near-field communication (NFC) capabilities let users check out without having to touch a point-of-sale terminal—an appealing feature at a time when physical distancing and hygiene are crucial to safety. For online transactions, digital wallets’ stored payment and shipping information removes the need for shoppers to interrupt their browsing to find their credit card and key in their information online. That makes it easier for shoppers who are scrolling from their couch or their verandah to complete their purchases. AUSTRALIANS’ MOBILE WALLET USE, OPTIONS GROWING FAST For all these reasons, total digital wallet use increased by 90% between in the year after March 2020, according to
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a Commonwealth Bank (CBA) report. CBA also found that the total digital-wallet transaction value during that time more than doubled, increasing by 110%. Those findings are complemented by a global study showing that 24% of Australian ecommerce payments in 2020 were made with digital wallets. Worldpay/FIS now forecasts that digital wallets will be the market’s top payment method for online purchases by 2024. Consumers have a growing list of digital wallet options, as more technology and fintech companies enter the market. In addition to mobile wallet services by tech giants PayPal, Google, Apple and Samsung, there are also banksponsored wallets like CBA’s tap-and-pay, Visa Checkout and Mastercard Masterpass, as well as smartwatch- and wearable device-based digital wallet offerings from Garmin, Fitbit and Apple. CX IMPROVEMENT OPPORTUNITIES FOR MERCHANTS Findings from a 2021 ClearSale survey of more than 1,000 Australian online shoppers highlight the ways that adding digital payment methods can increase cart conversions and inspire customer loyalty. First, there’s the issue of customer habit and preference. More than three quarters of Australian shoppers are already using digital wallets. Thirty-six percent of Australian consumers say they always use a digital wallet to pay online when they have the option, and another 40% say they do so sometimes. By giving customers the payment methods that they already prefer, merchants can avoid losing customers
