Faced the frustration of how to take cash or credit cards to the beach or a jog?
You’re not alone.
A Westpac survey this month found 75 per cent of people believe going to the beach is a hassle with cash or wallets, concerned about security. More than half have been stuck without money when exercising, and men and women regularly stuff cash in their underwear when heading out to avoid carrying a bag or wallet.
While Australia has the highest contactless payments penetration in the world, Westpac undertook the survey of 1244 adults aged 18 – 55 to better understand behaviours and attitudes towards “wearable payment” technology. The findings feed into the launch today of “PayWear”, allowing customers to make purchases on all contactless-enabled terminals just like tapping with a credit card or phone.
“With PayWear, there is no need to search through a bag, login to an app or worry about battery life. It will be on the go with our customers and ready for use when they are,” said Westpac chief executive, Consumer Bank, George Frazis.
The first iteration available early December, PayWear Essentials, includes a silicone wristband and a “keeper”, a device that contains a microchip linked to a transaction account and can be attached to a watch or fitness band. A designer range will follow next year, after the survey found 70 per cent of people would only wear a wearable device if it suited their own personal style. Several designers will develop the range, the first from surfboard shaper and entrepreneur, Hayden Cox.
Adoption of wearables is predicted to grow, a study from research group Telsyte released in September last year forecasting that 37 per cent of Australians would be wearing a smart wearable – bands and smartwatches – by 2020, up from 14 per cent, as new products are rolled out. Westpac’s devices – which were flagged in March as the bank did a pilot testing program with employees – are waterproof and battery-free. The PayWear Essentials range will be free to customers for a limited time, which Mr Frazis said was notable compared to other more expensive wearable payment options. Future pricing will be announced soon.
It comes amid a surge in payment device innovation, from mobile phone “wallets” to watches and “fitbits”, resulting in banks taking different strategies in a competitive market increasingly including technology giants such as Apple and Facebook. Technology is also an increasing focus for investors, Charlie Aitken chief investment officer of Aitken Investment Management this month writing on Livewire: “There is genuine technology driven structural change in banking that with both change the client/bank experience and lead, through time, to better returns being generated by banks who lead the technology revolution…the winner in Australia will be the bank who invests most in technology.”
In a speech earlier this month, Mr Frazis said banks would get “left behind” if they didn’t offer services that were intuitive, easy-to-use, quick to access, and personalised. Despite the potential for disruption, he said the digital revolution had only just begun and banks had to disrupt themselves and respond to customers’ changing needs, as Westpac had done by being the first to offer internet banking in Australia and Touch ID for mobile banking.
According to the Reserve Bank’s triennial “Consumer Payments Survey”, the landscape continues to change rapidly, marked last year by cards overtaking cash as the most frequently used means of payment for the first time. Mobile phone payments accounted for around 1 per cent of the number of point-of-sale transactions, a low level that was predicted to increase as the technology was rolled out.
Westpac and some other major banks haven’t signed up to Apple’s digital wallet, Apple Pay. Westpac does however offer Android Pay and Samsung Pay.
“Australia is fast becoming a less-cash society,” a report by the Australian Payments Network said in May, noting how ATM withdrawals fell by 22 per cent in the past five years amid declining use of cash. “Australians are embracing the convenience of contactless technology, which is contributing to the rise in card payments.”
By Michael Bennet
Editor, Westpac Wire