Aussies abandon cash with pandemic spurring digital shift

The lockdowns imposed around the world as a result of the COVID-19 pandemic have made getting to bank branches much harder, pushing people to become more digitally savvy when it comes to banking and apps. As a result, there has been a sharp surge in online activity to allow people to keep control of their finances, with 35% of Australians claiming they are now using banking apps more than before the pandemic.

Mastercard’s inaugural global State of Pay report, conducted with more than 14,000 people in 14 different countries, has revealed that 87% of people globally, who had not been using banking apps prior to COVID-19, said they will continue to use them after the pandemic.

Additionally, 84% of respondents said that using these apps was easier than they thought it would be, while 66% of all survey recipients were encouraged to explore other forms of digital payments as a result of the experience.

The COVID-19 pandemic has also driven the use of contactless payments, with Mastercard recording 40% in contactless transactions globally in Q1 2020; 80% of these transactions were under AU$35, a range typically dominated by cash.

Richard Wormald, Division President of Mastercard Australasia, said the pandemic has accelerated the use of the latest digital technologies and fuelled the evolution of new payment forms in Australia. The State of Pay report found that 48% of Australians are using their mobile phone to make payments (including mobile banking) or another functionality, while 43% said they use digital wallets when paying for items via mobile phone.

50% of respondents reported using in-app payments (eg, a store app), 12% said they used QR codes to make payments and 46% reported paying in a mobile phone browser via a card payment.

“The rate of adoption Mastercard has experienced in 2020 has been faster than ever imagined and it’s clear the trend is here to stay. Non-digital based payment methods are becoming less dominant, with even the most reluctant consumers and businesses in Australia trying digital banking and payment technologies for the first time,” Wormald said.

The report also identified a rise in other forms of digital payments, with 70% of people globally using their mobile phone to make payments. There has also been an increase in QR code payments, with adoption driven by young people.

A major contributing factor has been the decline in cash, with 60% of people globally believing contactless payments to be safer than physical money and 53% saying that cash is less convenient than other payment methods. 51% of Australians and 64% of global respondents reported that they will use cashless in future, as a result of the pandemic.

Image credit: ©stock.adobe.com/au/cheekylorns