Australian Mobile Payments Market to Reach Revenues of AU$17.71 billion by 2021
Sydney, Australia – 1 March 2017 – Throughout the Asia-Pacific, consistent progress by governments toward cashless societies is benefiting the mobile payments market. Australia is amongst the front runners leading this growth. A regulatory push towards cashless in Australia will see the AU$3 billion (US$ 2.08 billion) mobile payments market in Australia grow exponentially to reach AU$17.71 billion (US$ 12.28 billion) by 2021. The number of active customers too will double to 5.5 million users. With standardisation efforts lead by RBA and APCA in combination with increasing openness towards FinTech with ANZ Bank working with Apple, competition is intensifying for the entire supply side ecosystem.
To gain an edge, banks and mobile payments solution providers will need to fully understand the mobile payments market in Australia and how closer integration of payments with mobile technologies is critical to Australia’s successful transformation to a Cashless Society. The impending outcome of RBA’s consultation paper on Dual-Network Cards and Mobile Wallet Technology is expected to pave the way for inclusion of around two-thirds of the debit cards issued in Australia that have dual-network functionality onto mobiles. This is a key development in the market since debit cards dominate the payment cards market in terms of number of cards in circulation and will boost the mobile payments market significantly.
A dedicated analysis of the Australian market is included in the Asia-Pacific Mobile Payments report, which is a part of Frost & Sullivan’s Mobile & Wireless Communications Growth Partnership Service program. The report includes detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Related reports under this program cover the latest insights on eCommerce and mobile point-of-sale (mPOS).
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Australia is uniquely positioned to be a world leader in mobile payment developments with a technology savvy population, availability of contactless infrastructure and smartphone penetration that is high at 74% among adults. This coupled with recent advancements in technology with Apple, Samsung and Google having addressed existing security concerns through tokenisation in the payment infrastructure supplemented by biometrics on the smartphone in Apple Pay, Samsung Pay and Android Pay, and local regulatory push factors e.g. the planned removal of surcharging as early as 1 June 2017 and implementation of the real time New Payments Platform (NPP) in 2017, forms a powerful combination for the local Australian market.
Further, the Australian government’s recent formation of a task force that will also study the ramifications of deliberate phasing out AU$50 and AU$100 bills, which make up 92.3% of Australian physical currency, will not only address tax evasion and crime but will also spur the transition to mobile payments already operating below the cap at AU$100 and spearhead Australia’s transformation to a cashless society ahead of its Asia-Pacific peers by 2022. In all this, mobile payments will be a key enabler of Australia’s successful transition.
“Aside from this, the mobile payments market is also guided by local preferences and considerations,” noted Frost & Sullivan Digital Transformation (ICT) Industry Principal Analyst Quah Mei Lee. “For instance, a strong preference for contactless payment over cash is behind Australia’s worldwide lead in contactless payments. The underlying influencing factor for this local preference was the fact that cards were a key payment method in Australia and that Australians were already used to paying for food and drink using their credit/debit cards every day.”
She continued, “The introduction of contactless payments effectively made the user experience faster, easier and more convenient. Since then, ubiquitous contactless payments facilities beyond just retail, for example, public transport tickets, parking meters, roads tolls and so on, and the complementary cashless facilities such as cardless ATM withdrawals using smartphones, have made going cashless a conscious choice and a part of everyday life in Australia. Understanding these dynamics is critical for banks and mobile payments solution providers to succeed.”
“The opportunities are limitless and mainstream integration of mobile payments into everyday life is already underway. Revolutionising retail payments through innovation is a key growth area. Companies such as Optus with Retail Assist and Verifone with their omnichannel retail solution are already changing the retail landscape in Australia. With Amazon’s imminent physical entry into Australia in July 2017, the till-less Amazon Go shopping experience could be an eventual possibility,” said Quah.
“Even beyond this, there is tremendous potential for growth alongside connected devices in the Internet of Things (IoT) era. Honda’s in-vehicle payments for parking and fuel in partnership with Visa as well as Softbank’s robotic service attendant called Pepper in partnership with MasterCard may soon find its way to Australia,” she added.
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