ANZ introduces Apple Pay

By: Pete Chamberlain
Date: May, 2016
File under: Articles

Mobile payments industry report update

Last year, our U1 industry report “What will it take for banks for triumph over Apple Pay?” explored the emerging mobile payments market in Australia. We investigated consumers’ attitudes towards mobile payments and the major barriers to the uptake of third party payment services such as Apple Pay.

Although our research found that 60% of Australian consumers were willing to adopt mobile payment technology, Australian banks resisted the introduction of Apple Pay – until now.

Banks monopolising mobile payments in Australia…

While American Express customers have been able to use Apple Pay since November 2015, bank-issued credit cards and debit cards have not been eligible for the service. Instead, banks in Australia have pushed their own mobile payment services to maintain control over income received from transaction fees. This move was fine with customers – our industry report found that 88% of respondents preferred a mobile payment solution provided by their bank over a solution provided by a third party (such as Apple) anyway.

…Unless you’re an iPhone user

But for iPhone users, there is no bank-provided solution. It’s Apple’s way or the highway as far as mobile payments on iPhones go. This limitation is significant for banks such as ANZ, as iPhone users make up 69% of their mobile banking market.

The success of the iPhone 6 and the subsequent iPhone 6s has meant that Apple has maintained a significant proportion of Australia’s smartphone market, forcing the banks to look into Apple Pay as a mobile payment solution for their iPhone-toting customers.

ANZ joins forces with Apple

Last month, ANZ became the first Australian bank to offer Apple Pay to its customers. Described by ANZ CEO Shayne Elliott as “a watershed moment in the adoption of mobile payments in Australia,” this may be the foot in the door Apple has been waiting for. It may also be, as Shayne Elliot alluded to, a significant step for mobile payments in general.

Our research concluded that consumers would only adopt mobile payments if they offered a convenient, secure, reliable and user-friendly alternative to card payments. With a secure and intuitive interface, Apple Pay may help transform mobile payments from a gimmick into a mainstream payment method.

Last year our industry report posed the question “What will it take for banks for triumph over Apple Pay?” At the time, the answer seemed like a stone wall of solidarity. But with ANZ now on board, will the remaining big three banks hold their ground? No doubt they’ll be watching closely as ANZ customers progress from this ‘watershed moment’.

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