When it comes to payments, Australians still reach for physical cards more than any other type of payment. But that’s changing and it’s predicted that digital wallets are set to become the main payment method for Australian consumers from as early as 2025.
Australians were early adopters of contactless payments, so it’s expected that as new payment options become available, they will be embraced also. The challenge for commerce businesses – particularly SMBs – will be to understand how the landscape will change, and to build the capability to accept a dizzying range of new payment choices.
According to a recent survey from Marqueta, consumers already using traditional and digital bank services grew from a quarter in 2022 to 37% in 2023.
This migration will get a boost from Treasurer Jim Chalmers who recently announced plans for payment reforms designed for the digital era, underpinned by the New Payments Platform (NPP) and the introduction of PayTo, the Reserve Bank of Australia-backed real-time payments system.
In the private sector, digital wallets are on the rise, with Woolworths and Coles launching their own offering – Coles partnering with AP+, the umbrella entity for BPAY, eftpos and NPP Australia.
Major payment provider Stripe has recently announced that it has inked a “strategic payments partnership” with Uber, which will enable eftpos on the app in the Australian market.
Similarly, FIS Worldpay has worked directly with eftpos to roll out chip and contactless cards and enter the online and mobile payment spaces. The central bank is even testing a digital currency of the AUD.
While we may not see the proliferation of payment methods experienced in markets like Southeast Asia, in two-to-three years, it’s expected the number of payment options for businesses of all sizes will go from two to three to 10 or more.
For businesses, this shift represents an opportunity to capture a greater share of national or even global customers – both B2C and B2B and potentially lower the cost of transactions.
It also recognises that a business’ payment process is no longer purely transactional, but an important part of the brand experience.
Payments can no longer be seen as the last stage of the customer transaction, but the beginning of a post-purchase customer experience and the perfect opportunity to cultivate a stronger brand relationship.
It is important to get it right – the average cart abandonment rate in Australia is just over 70%, with a lack of preferred payment options a key reason behind it. And optimising payments can help to mitigate fraud, improve operational efficiency, increase payment acceptance, and lower cost per transaction.
The downside is that this integration can present significant technical challenges, particularly to SMBs which might be cost-constrained and without significant developer resources.
Traditionally, the process of integrating new digital payment methods to a website requires one-off integrations, with payments running off layers of ‘rails’ infrastructure which are needed before each payment application can be built.
Of these rails there are multiple types, with limited interoperability between them. This adds further complexity to a business’ payments roadmap, or implementation plan.
But just as the payments landscape is evolving quickly, so are the platforms that enable businesses to offer a number of payment options without months of developer work.
These ‘no-code’ platforms offer pre-built integration with popular payment gateways without the need for businesses to develop custom payment solutions from scratch. Businesses can customise their payments, manage recurring payments and subscriptions, optimise payments for mobile and provide analytics, reporting and security features.
These platforms empower SMBs to quickly establish their online presence, offer a seamless user experience, access multiple payment methods, and maintain security and compliance.
With a new age of online payments around the corner, success will belong to businesses that cast their nets wide by giving customers the most choice in how they can pay, and by making the experience so smooth and seamless that they keep coming back.
It will be a complex transition, but no-code platforms will level the playing field – enabling SMBs to better compete with larger providers – that have greater resources and development capabilities – in the bustling digital marketplace.
Author: Sameer Talwar, Head of ANZ, Primer
Primer is a member of our Payments Orchestration and Token Vault Panel.
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