Mobile Payments: Trends and Growth in New Zealand
The recent introduction of mobile payment technologies has significantly changed the way New Zealanders go about buying goods and services.
Whereas cash was once king, around 84% of Kiwis now use contactless payment methods for some or all of their transactions.
Indeed, such has been the rapid adoption of mobile digital payments that some experts believe Aotearoa could become completely cashless by 2050.
Given how fast financial technology changes and that new and improved solutions are being worked on all the time, it begs the question of what other trends and growth practices can we expect to see in New Zealand in the coming years.
We are not saying these will definitely happen, but here are a few things to look out for.
1. Mobile EFTPOS
EFTPOS has really taken off in New Zealand, to the point there are now around 85,000 merchants operating about 170,000 terminals throughout the North and South Islands.
While these are primarily placed in physical stores, it is a fair bet that they will become increasingly popular at mobile locations, such as food trucks, market stalls and outdoor events. That is because customers like the speed, convenience and safety this type of payment method brings.
If you are a sole trader or small business that can benefit from trading outside of your physical store location, a portable eftpos machine provider in NZ like Smartpay offers a wide range of solutions.
2. Digital Wallets
A few years ago, it would have been unthinkable for people to leave their houses without a physical wallet. But now, it is becoming a common occurrence.
Over the ditch, around 40% of Aussies do not take one with them whenever they go out, and over the next few years, it's likely that a similar number of Kiwis will do the same.
Increasingly, millennials, as well as Gen Z and X have started to favour digital wallets over their physical ones because not only does it offer the benefits of convenience and speed, but it also means they have less to carry around with them – particularly if they are wearing an outfit, like a dress, that has no pockets.
The great thing about digital wallets is that your payment information is stored securely on your smartphone or other device via applications like Apple Wallet, Samsung Wallet or Google Wallet. This enables you to easily pay for a purchase just by putting your phone against the payment terminal.
3. Instant Payments
Not so long ago we were all resigned to waiting between 1 and 5 business days for a payment to process or a cheque to clear.
However, thanks to recent advancements in the FinTech industry, banks and other financial institutions now have the capability of processing instant payments that register in or out of your account in seconds.
As this is a godsend for businesses who want to improve their cashflow and can also help shoppers to better manage their budgets, you can expect to see it become more commonplace.
4. Increased use of AI
While it might have gone under the radar of many people in New Zealand, Artificial Intelligence has been at the forefront of recent advancements in mobile payments and payment processing in general over the last decade.
As it can process and analyse massive amounts of complex data, it has been used to create more robust strategies and solutions to make transactions within the FinTech industry safer, quicker and more personalised.
Congruently, it has been able to predict and stave off cyber-attacks that have targeted major payment ecosystems around the world, which could have caused significant damage had they not been prevented.
In the coming years, artificial intelligence should be used even more extensively to further safeguard and enhance the way transactions are managed.
5. Biometric Authentication
Security is a vital component of payment processing. Therefore, as more people embrace digital payments over traditional methods, it's highly likely that biometric authentication will become even more integral to it.
The adoption of biometric practices can be traced back to Ancient Egyptian times when handprints and fingerprints were used as seals and signatures. However, in its most modern form, this technology has been refined to embrace unique physical and behavioural characteristics such as facial or voice recognition to verify an individual as genuine.
Subsequently, for retailers and consumers in New Zealand, this technology offers an outstanding level of protection against fraud - work on which will be constantly done in the coming years to further enhance it.
6. Cryptocurrencies as a payment option
Cryptocurrencies such as Bitcoin, Tether, Dogecoin and Ethereum become increasingly popular in recent years, to the point that many businesses are now accepting it for payments.
This includes the likes of Freshstore, Electrolux Vacuums, Hyperion Wines, Mixed Media Marketing and Quarrie Electrical LTD.
It seems a safe bet then that plenty more companies will embrace cryptocurrency in their suite of payment options in the not-too-distant future. Doing this will open them up to the potential for new customers and increase profitability.
7. Open Banking
It’s entirely possible that the payment technologies we will be using in the next couple of decades have not been invented yet. However, thanks to Open Banking the potential for new services and apps to be developed is very real.
Open banking is a system where financial institutions, through APIs, can share data with third-party providers. As a result, companies can more easily develop solutions which provide end-users with a more seamless and integrated payment experience.
