The Australian payments industry is set for a major shake up as Apple Pay and a new National Payments Platform (NPP) are ushered in to enable real-time payments.
But while awareness around ApplePay among Australian businesses is high, the same cannot be said for the new payments platform, which is set to cost the financial services industry more than $1 billion to implement.
Just five per cent of businesses are aware of the new platform, due to roll out in 2017, which will make funds available almost instantaneously following a transaction. That's according to Business Attitudes to Electronics Payments Systems study, conducted by Roy Morgan Research.
The platform is expected to open up opportunities for new services, streamline the payments process, and will allow payments to be directed to a specific account using either a mobile phone number or an email address.
The study also found Australia's hunger for mobile and digital services was revolutionising the way businesses were paid for their goods and services, with almost half (45 per cent) of Australian businesses accepting customer electronic payments using methods such as PayPal or digital wallets.
Two-thirds (64 per cent) of these organisations say the practice is “extremely” or “very” critical to their business.
Roy Morgan general manager of financial services, Jason Hulme, said financial institutions and their customers would experience unprecedented levels of change over the next few years as new payments methods continue to emerge.
"This will open up opportunities for banks to get closer to their main financial institution customers in a very tangible way," he said.
"On the flip side, unless Australia’s major banks are proactive and support this change, the threat of losing this vital touch point to third parties is very real.
He said customers would continue to raise their expectations in terms of speed, convenience, and security.
"As a result, it would be short-sighted to assume that the likes of PayPal, crypto-currencies, and digital wallets will be the end of innovation in this space.
"Banks must support both their merchants and customers to ensure that, where appropriate, preferred methods of payments are supported.”
Hulme said Australia was ripe for disruption in the payments space.
"We are looking at a three factor industry and unless we have alignment between the merchants, the banks and the consumers change just won't happen," he said.
"Within Australia is a micro-climate in payments. There are four major banks, two major retailers. If we get alignment and agreement on that front and we have the technology adoption and penetration, then change can happen quickly.
"If we think that three year's ago PayWave really didn't exist and we would buy our morning newspaper in cash.
"Now we don't buy a morning newspaper and we don't use cash. So the rate of change is driving a lot of innovation irrespective of how fast we are running.
"In many ways we have the technological ability to see this change come through very quickly."
Among the most frequent recipients of electronic payments are businesses in the retail trade (84 per cent), accommodation and food service industries (87 per cent), organisations with an annual turnover in excess of $1 million (64 per cent) or with more than 20 employees (72 per cent).
In general, the relationship between businesses and their electronic payments providers is robust. Almost two-thirds (62 per cent) say they are satisfied or more than satisfied with their provider.
However, the need to select a payments provider for new payment methods has led some organisations to look beyond the traditional primary business banking account. Three in ten (30 per cent) businesses report using a different bank or work with a non-bank provider for electronic payments.
The research found that only the largest of businesses – those with an annual turnover of $50 million or more – tend to consider using their bank's working capital solutions, such as cash management functions, automatic notification of receipt funds or withdrawals, trade payment capabilities.
PayPal is by far the most requested of new payment methods, used by more than three in ten organisations operating in the following sectors: wholesale trade; professional, technical and scientific services; retail trade; and manufacturing.
HCL A/NZ country manager, Michael Horton, said as organisations put in place the processes and procedures to manage new payment methods such as PayPal, they would also faced with an opportunity to consider what they want out of a payments provider relationship.
"One of the very clear findings of the study is that more than half of businesses will consider changing that relationship for better pricing of services," he said.
"One in four can be swayed by more reliable technology or by faster funds availability.”
While ApplePay is not yet available in Australia, the country's high rate of near-field communications adoption in retail outlets will give it a wide berth.
HCL payments principal, Mitch Green, said it was the most exciting time in the Australian payments industry he had encountered in his 18-year career.
"One of things we have done is think about what we feel financial institutions must have in place to support this changing payments environment," he said.
"We are going to have a lot of competition, not just from traditional competitors, but from GAFA [Google, Apple, Facebook and Amazon]. There are lots of small to medium startups that will impact how things are occurring.
"Once Apple Pay is deployed in Australia, it's going to really interesting to see how that moves forward."