Table of Contents
After the pandemic, the world has undergone a significant digital transformation, impacting both business and life.
Australia is also fast becoming a cashless society. Although cash is still important, there has been a significant decline in physical wallets attributed to the widespread adoption of digital payments. According to the research of the Reserve Bank of Australia, in 2021, monthly digital wallet transactions were up 90%, and 50% of surveyed Australians strongly preferred online banking.
Nowadays, Australian consumers are seeking faster, safer, and more convenient payment approaches. Various online payment solutions exist to aid businesses in offering a seamless checkout experience. Here’s a roundup of the most popular digital payment options in Australia.
1. Digital Wallet
Digital or e-wallets rank among the most preferred online payment methods in Australia. This category enables users to make contactless payments by connecting to their debit or credit card details, eliminating the necessity for a physical payment card.
The Australian Banking Association found that the use of mobile wallets is rapidly increasing, with mobile wallet transactions surging up to 8,200% from 2018 to 2022, and is anticipated to grow continuously in the upcoming years.
What makes e-wallets popular?
The reason behind the widespread of digital wallets is their exceptional convenience. Digital wallets can store information from multiple credit and debit cards, as well as store cards, memberships, and event tickets. They are fully encrypted and safeguarded with passwords, ensuring security for both consumers and businesses.
Some of the most well-known digital wallets include Apple Pay, Google Wallet, Samsung Wallet, PayPal, AliPay, Walmart Pay, Vodafone M-PESA, etc.
Accepting mobile wallets in your organization
Some specific technologies used by mobile wallet payments include:
- QR codes: or quick response codes, are matrix barcodes designed to store information. To initiate a payment, you use the device's camera with the wallet's scanning system.
- Near Near-field communication (NFC): is a technology that enables two smart devices to connect and exchange data using electromagnetic signals.
For businesses embarking on a newly developed or upgraded mobile wallet project, the KMS Solutions development team can offer a range of cutting-edge contactless solutions to meet your needs.
2. Peer-to-peer (P2P) Digital Payments
P2P payment platforms, such as Venmo, PayPal, and Cash App, facilitate these transactions, allowing users to send and receive money directly using their mobile devices connected to a bank account or card.
What makes P2P digital payments popular?
With no need to set foot in a bank or currency exchange office, this payment method allows individuals to transfer money quickly and effortlessly. Transactions can be completed instantly using mobile devices, making them convenient for daily use.
As security is the biggest concern of Australians when using mobile payments, this method prioritizes security measures such as encryption and authentication to protect users' financial information and prevent fraud. Most P2P systems are currently regulated by the Australian Securities and Investments Commission (ASIC), necessitating adherence to specific transparency criteria.
Accepting P2P payments in your organization
In P2P payments, the intermediary is eliminated. Instead, individuals can directly send and receive money from their contacts using a designated P2P platform. Here's the process:
- Research and choose a P2P provider: Explore different P2P payment platforms based on fees, security features, integration capabilities, etc. It’s worth considering a provider that best meets your business needs and preferences. Ensure that they can offer features like invoicing, recurring payments, and customizable branding if needed.
- Setup accounts: Sign up for a business account on the chosen P2P payment platform and provide necessary information such as business details, bank account information, and contact details.
- Customize settings: You can set up approval workflows, payment limits, and notifications to manage P2P payments effectively.
- Integrate with existing business systems: Ensure seamless data flow and simplify reconciliation processes.
3. Social Payment Systems
Australian companies are experiencing intensive growth with the assistance of social media platforms. Facebook, Instagram, and Pinterest business accounts all provide in-app and in-store purchasing options. This digital payment method enables users to link their bank accounts directly to social media platforms and transfer funds securely.
What makes social media payment popular?
With the increasing popularity of social media, this approach has emerged as a vital aspect of the digital payments sphere, providing users with an additional layer of convenience and connectivity.
Beyond enhancing convenience, social media payments can boost conversion rates for businesses by minimizing friction during the purchasing process. With a seamless payment experience, consumers are more likely to complete their transactions, resulting in increased sales and revenue for businesses.
Accepting social media payment in your organization
The best approach for accepting social media payments varies depending on the platform being used. Each platform, such as Facebook, Instagram, and Pinterest, offers distinct social selling functionalities. Therefore, businesses should explore account settings to understand the process of initiating payment acceptance.
4. Buy Now, Pay Later (BNPL)
Another category of payment that’s quickly growing in popularity recently is Buy Now Pay Later (BNPL). This payment method is similar in some ways to a credit card, which means it enables customers to make purchases immediately and defer payment for them overtime, with a series of low or no-interest installments.
The BNPL method makes it possible to finance purchases via a simple and easy-to-understood repayment plan, typically on a weekly or monthly basis. If any credit check is needed for BNPL approval, it typically involves a soft credit check.
What makes Buy Now Pay Later (BNPL) popular?
BNPL services have become increasingly popular, especially in the e-commerce industry, as they provide consumers with an alternative to traditional credit cards or loans, resulting in greater flexibility and convenience. This payment method motivates users to make purchases that they would otherwise not have been able to afford, leading to a boost in sales.
Nowadays, this payment approach can be easily integrated into the checkout process of many online and retail stores. Moreover, some BNPL providers offer interest-free periods, allowing consumers to pay off their purchases without incurring any additional costs.
Some best BNPL platforms in Australia are AfterPay, Paypal Credit, Karna, Splitit, Zip, etc.
Accepting BNPL in your organization
- For small-to-medium corporations, choosing between leading BNPL providers can be cost-effective. Some platforms offer a single API integration that allows businesses to integrate them into the system effortlessly. The KMS Solutions software development team has experience helping one of the well-known trading platforms in Australia successfully integrate 9 PSPs within only 5 months. Explore the case study here!
- For enterprises conducting numerous daily transactions that incur fees ranging from 2% to 8% for every transaction completed, building and running an internal custom BNPL system is worth considering.
5. Cryptocurrency Payments
The emergence of cryptocurrencies into financial technology constantly rises and evolves to become more prominent, yet many remain unfamiliar with it, particularly regarding its acceptance as a legitimate digital payment method.
This digital asset is based on decentralized networks, enabling them to exist independently of government oversight and central authorities. Cryptocurrencies are a product of blockchain technology.
What makes cryptocurrencies popular?
As per CoinMarketCap, the cryptocurrency market is valued at US$1.9 trillion as of February 2022 and has continued to increase since conventional banks and authorities began to recognize and incorporate cryptocurrency into their financial systems.
Everyone, especially young to mid-aged consumers, has increasingly invested in digital coins to further ease their access to online payment methods. Cryptocurrency boasts various benefits, including:
- Enhanced payment security: Since cryptocurrencies operate on decentralized networks, security breaches like cyber attacks, scams, counterfeiting, and double-spending are considerably minimized.
- Speedy transaction process: Without intermediary third-party involvement, crypto transactions are faster compared to traditional payment options.
Accepting cryptocurrencies in your organization
Merchants can accept cryptocurrency through various methods, including both online and in-person payment options:
- Cryptocurrency POS terminals: Many providers now offer cryptocurrency acceptance similar to mobile wallets or contactless card payments.
- Personal crypto-wallets: Merchants can set up a wallet to facilitate P2P transfers for goods, leveraging customers' existing crypto wallets.
- Crypto digital payment plugins: e-commerce platforms offer a variety of apps and plugins that enable businesses to integrate the acceptance of this payment approach into their websites.
6. BPAY Payments
BPAY is short for "bill payment," an electronic bill payment system widely used in Australia. BPAY is a service that enables customers to make payments using their online banking application. It’s accessible to any Australian customer having a card developed by major Australian banks such as Commonwealth Bank, ANZ Bank, NAB, Westpac, Western Union, BankWest, Citibank, ING Direct, and Bendigo Bank.
What makes BPAY payments popular?
According to research carried out by RFI, BPAY handles more than 1.6 million payments every business day, which means 60% of Australians pay their bills using BPAY through 150 financial institutions, including banks, building societies, credit unions, and neobanks, offer the BPAY option. The reason for its popularity is BPAY transactions are typically processed electronically and securely, providing a convenient and efficient way to manage bill payments.
Accepting BPAY payments in your organization
BPAY functions similarly to Mastercard and Visa credit cards, establishing contractual obligations among participating financial institutions.
Businesses and organizations in Australia become billers in the BPAY system by registering with BPAY Pty Ltd. through their respective banking institution. To qualify, a biller must have an Australian Company Number (ACN) or Australian Business Number (ABN), and a bank account with an Australian financial institution. Billers specify the bank account for receiving payments and the account for fees to be deducted.
How We Can Help You Keep Up With the Future of Digital Payments
Not every business needs to immediately integrate all of the aforementioned digital payment methods. However, it’s helpful to understand all of them to be ready to adapt when required.
Furthermore, selecting a payment processor that supports the current most widely used digital payment technologies is worth considering.
With more than a decade of experience in technology, KMS Solutions development teams collaborate closely with businesses to understand their unique requirements and provide a range of software solutions to help clients take on the digital payments world.
Having an idea to build a digital payment for your business? Contact our team now!
