As the push for payment convenience continues, Australia could become 98 per cent cashless by 2024, according to a recent forecast.
New data from global payments giant FIS indicates cash payments will dwindle to just 2.1 per cent of all transactions within the next three years.
Spurred on by the fallout from Covid-19, the move away from cash is also the result of an increased emphasis on convenience.
So as a retailer how do you accommodate the payment shift?
The trend away from cash
Australia has traditionally been a swift adopter of new payment technology, including EFTPOS, digital wallets, and tap-n-go.
Last year, that trend accelerated rapidly with cash considered a risk in the spread of Covid-19.
That saw a spike in contactless payments with consumers opting to use the tap-n-go feature on their credit or debit cards, or alternatively the digital wallet on their mobile phone.
The FIS Global Payments report notes in 2020 Australians used less cash to make in-person payments, with credit cards, debit cards and mobile wallets proving the most popular payment options.
Looking ahead, they predict cash use will continue to decline across the Asia Pacific region, falling to just 2.1 per cent by 2024.
mPOS becomes essential
With a near-cashless economy looming large on the horizon, bricks and mortar retailers are turning their attention to the convenient payment options offered by mobile Point of Sale.
Now more affordable than ever, the system sees the traditional Point of Sale offered via a handheld device such as a tablet with a payment processor attached.
Convenient for both the retail outlet and the consumer, mPOS allows sales to be processed on the retail floor, cutting time spent in the queue, while offering an improved customer experience.
As a result, Statista forecasts:
- Mobile POS Payments will reach AU$32,944 million in 2021.
- The average transaction value per user in the Mobile POS Payments segment is expected to amount to AU$8,473.6 in 2021.
- Transaction value is expected to show an annual growth rate (CAGR 2021-2025) of 28.24 per cent resulting in a projected total amount of AU$89,101 million by 2025.
- In the Mobile POS Payments segment, the number of users is expected to amount to 6.2 million users by 2025.
It’s all about convenience
As a recent report by Retail Touchpoints notes, the shift to mPOS is all about convenience, and at present that convenience involves contactless payments.
“The POS is the customer’s last experience on any given trip, so any friction or delays felt here will be magnified — and implementing the right payment procedures can increase comfort and speed up the checkout process,” they explain.
They also note, however, what constitutes convenience can quickly change.
“Something to keep in mind when perfecting a POS strategy is that the definition of convenience is a moving target.
“While this always comes down to helping shoppers check out as quickly and easily as possible, their expectations are always evolving alongside payment providers’ capabilities. Right now, this means contactless, but preferences can and will change in the future,” they state.
“Retailers need to keep their fingers on the pulse of not just their customers, but the payments industry as a whole.
“Being ready to implement the latest and most efficient payment options ahead of your competitors can simultaneously drive convenience and ensure that the early adopters among your customers are getting the exact experience they want.”
Meanwhile, their research indicates both shoppers and retailers are rising to the mPOS challenge.