The way we use online banking is changing as technology allows us to conduct more banking tasks on the move rather than when we are at home on our PCs.

The proliferation of contactless acceptance devices, seen at merchants, restaurants and in taxis, buses and trains allows consumers to make Near Field Communication (NFC) based mobile payments and other transactions from a handset.

This development seems attractive to consumers. In a recent survey by the Reserve Bank of Australia, titled The changing way we pay: Trends in consumer payments, over 20% of Australian consumers said that they would be likely or very likely to use NFC payments, if they were available.

The main factor causing this trend is the adoption of contactless acceptance devices and mobile banking apps that offer retailers the ability to accept payments and consumers the chance to make payments and conduct other online banking tasks.

Home computer users still dominate online banking, but users of other mobile devices are fast catching up and will overtake home computer users by 2017, according to statistics from Westpac.

BPAY has also seen this trend, with 20% of the 30 million BPAY payments made in December 2014 were from a mobile or tablet.

Another factor causing the move to online banking via mobile devices is that people have increasingly busy lives and want to be able to get things done on the move.

The use of mobiles for banking means people can make payments or pay bills on their commute to work so they have more leisure time, as it is one less task that needs to be performed at home.

The data shows that mobile banking and payments are increasingly being used to replace payments made from a computer.

In 2013, according to the Reserve Bank of Australia survey, 28% of respondents had made a payment or transfer with their mobile phone, up from around 10% in 2010. 22% of people who had made smartphone payments or transfers did so relatively frequently, with around one-third of people who made smartphone payments making at least one during the week of the survey.

This suggests once people start using their mobile devices for online banking they stick with that method.

As with all payment trends, including the use of cash, payment and banking habits generally become ingrained by the age of 30. This means it could be generations before everyone banks online.

However, as with the smartphone data referenced above which shows they use this method often once adopted, people that start banking via their mobiles are likely to do this regularly and to the exclusion of other methods.

The trend will accelerate as consumers are ‘trained’ in using technology in this way and as banks and mobile providers offer the tools to allow them to do so.

Firstly, consumers need to have the technology and secondly, financial institutions such as banks and mobile/tablet smartphone operators need to offer the software or applications so consumers can use it.

The major banks in Australia are all trialling and/or rolling out mobile phone NFC capability. In many overseas markets, the adoption of this form of payment by consumers has only happened once the mass transit eTicketing system has been embedded within the mobile phone.

This serves to “train” consumers to adopt a new behaviour of tapping on and tapping off with their mobile. This has yet to occur in Australia, but the infrastructure is gradually being introduced and the survey data suggests consumer sentiment towards these developments is very positive.

Factors that may hinder this development are that consumers may be reluctant to adopt the use of mobile devices to make payments because of security concerns, especially in the short-term, until the new methods have been conclusively proved to be safe and cannot easily be accessed to commit fraud.

Another factor limiting the adoption of mobile payments in the short term shown by the data is that some retailers still prefer to operate in cash as the transaction cost to them is nil. Even given that it is anticipated that the growth in mobile payments is likely to be exponential.

This article represents the views and opions of the author and do not necessarily reflect the opinions of BPAY.

Published by BPAY Pty Ltd.  BPAY is offered by over 150 Financial Institutions. Contact your Financial Institution to see if it offers BPAY and to get the terms and conditions. This is general advice – before using BPAY please review the terms and conditions and consider whether BPAY is appropriate for your personal circumstances.

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