Thursday, 21 May 2015 14:52

The smart way to pay is by phone for many consumers

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Consumers using mobile payments technology have cast aside their debit cards and now use their mobile phone for many purchases, particularly when buying groceries or takeaway meals.

At least, that’s the experience of Australian-owned financial institution CUA and payments company Cuscal, as they explained at the 2015 Cards & Payments Summit held in Melbourne this week.

In July last year, CUA became the first banking provider in the Asia-Pacific to roll out a free mobile app using HCE technology, which allowed customers to ‘tap and pay’ with any compatible Android phone. The mobile app - CUA redi2PAY - was developed by Cuscal and works on any NFC-enabled Android phone running on KitKat 4.4 or later.

“It appears that CUA’s early adopters of mobile payments technology are literally swapping their debit card for their mobile phone, using it for the same kind of purchases as they would have made with a traditional plastic card,” CUA Head of Customer Insights Chris Malcolm says.

According to Malcolm, groceries were the top retail category for redi2PAY transactions, followed by fast food, petrol stations, restaurants/ dining and alcohol purchases.

“Interestingly, the top five retail categories for redi2PAY mobile payments are the exact same retail categories where CUA customers make the highest number of Visa PayWave purchases using their debit card.”

Customers using redi2PAY are also using it more frequently. The number of customers using redi2PAY more than 35 times per month was around three times higher in March than it was six months earlier in October, while the number of customers using mobile payments semi-regularly (5 to 14 times per month) is up 63% for the same period.

“There is huge potential for this technology to fundamentally change how people pay for purchases,” Malcolm said.

“People tend to take their smart phones everywhere they go and now, the need to also carry cash and cards in your wallets is becoming a thing of the past.”

He said approximately eight times more CUA customers now have a compatible Android phone which could be used for redi2PAY, compared to a relatively small group of customers who had the required technology when redi2PAY was launched 10 months ago.

“We’re seeing increased take-up of this HCE technology across the banking sector, as others follow our lead. The use of ‘mobile wallets’ will only continue to grow as customers become more familiar with the technology and its security features, and upgrade their Android devices to the latest models.”

A case study on how customers are using their ‘mobile wallets’ on the redi2PAY implementation, reveals some interesting data, including:

•    Customers spend an average of $27 per transaction when using CUA redi2PAY – the same as the average amount for Visa PayWave purchases

•    The number of redi2PAY transactions spikes towards the end of the week (Thursday to Saturday). Saturday has the highest number of redi2PAY transactions, while Sunday has the least. Visa PayWave transactions also peak on Saturday, while Monday has the lowest number of payments

•    Most mobile payments occur between 12pm and 8pm, with a spike from 1-2pm. The trend is similar for Visa PayWave payments

•    The number of redi2PAY transactions each month has increased by more than 16 per cent since September 2014

•    December 2014 recorded the highest value of redi2PAY transactions for a single month, coinciding with the lead up to Christmas.

Transactions: redi2PAY vs Visa PayWave

(1 September 2014 to 31 March 2015)

CUA redi2PAY

CUA Visa PayWave

Category of retailer

Transactions

Category of retailer

Transactions

1. Grocery stores

26%

1. Grocery stores

27%

2. Fast food outlets

17%

2. Fast food outlets

17%

3. Service stations

14%

3. Service stations

11%

4. Restaurants

10%

4. Restaurants

11%

5. Liquor outlets

4%

5. Liquor outlets

4%

6. Convenience food stores

4%

6. Convenience food stores

3%

7. Discount stores

3%

7. Discount stores

3%

8. Pharmacies

3%

8. Pharmacies

3%

9. Variety stores

3%

9. Hardware stores

3%

10. Hardware stores

2%

10. Bars/ pubs

2%

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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