Key takeaways

  • Over half of all Australians have made a transaction using contactless technology.
  • Payment options via mobile and wearables are becoming increasingly available.
  • What factors will lead to consumers leaving their wallets and credit cards at home?

A new report has revealed that a quarter of Australian consumers are willing to consider what may seem an extraordinary step in contactless payments: implanting a commerce-enabled microchip into your body.

The ability to pay for goods at pay points using just a swipe of your hand, embedded with a subcutaneous chip, is of “slight interest”, say 25% of respondents. The research, commissioned by Visa, was compiled from a survey of 1,000 people, reports The Australian.

Only a slightly higher figure of Australians, 26%, would be interested in paying for goods via smartglasses, 29% with a smartring, and 32% using a smartwatch.

While embedding microchips into your body to replace the inconvenience of pulling out your wallet may yet seem far-fetched (although the technology has been around for a decade), the drive towards innovative new payment methods continues apace.

Cashless society could be reality

Australia, recognised as a nation of early adopters, may not be so far behind. “This is an incredibly innovative market,” proclaimed Ann Cairns recently, MasterCard’s president of international markets. Indeed, Australians are the global leaders in contactless payments in terms of both awareness rates and usage, with 53% having made a transaction in this way.

Similar to contactless card payments, contactless mobile payment technology requires an enabled mobile device to be waved over the merchant’s reader at point of sale.

An early example of this appeared in Australia almost seven years ago, in a joint enterprise by Telstra, NAB and Visa. Paypal, Commonwealth Bank, Westpac and Optus have all recently launched contactless mobile payment solutions. Launched in the US in October 2014, Apple Pay has not yet announced its launch date for Australia. However despite the increase in options for contactless mobile payment, the adoption of this technology is still in its early stages here.

We can also expect to see payments via smartwatches before long, with both Commonwealth and Optus saying they are developing this capacity.

Driving forces to adopt digital payment

Microchipped body parts aside, it is clear the Australian consumer is not averse to the digital transformation of payment methods, but they may take some convincing to fully embrace contactless mobile payments.

Two of the major driving forces for adoption are convenience and security. With just a tap to complete the transaction, contactless payments are certainly faster and easier than using cash or entering a pin number. Mobile payment solutions don’t require you to also carry – or run the risk of losing – a wallet.

With trust high on the agenda, mobile must also be seen as a more secure method of payment to be adopted. Apple Pay, for example, doesn’t share card or account details with the merchant – instead, it uses encrypted codes when making a transaction, meaning that even if your sales data was compromised, thieves would not have access to your account details. An attractive prospect that could swerve traditional consumer fears of credit card fraud.

Between now and the surmised days of microchip implants, a spectrum of innovative technologies will enter the payments space. This won’t be a slow process. The leaders will be those organisations that take the opportunity to engage with consumer preferences by leveraging new payment methods, prioritising user experience and securing trust in their technologies.

Additional reporting by Evan Hinchliffe, Consulting Payments Lead, PwC Australia



Tan Allaway

Tan Allaway is the editor-in-chief of PwC’s Digital Pulse.

More About Tan Allaway