Banks could take revenue hit following Apple Pay and iPhone 6 launch: Roy Morgan
- 29 September, 2014 10:50
Australian banks could be set to take revenue hit as more than 1.5 million Australian purchase an iPhone with the new Apple Pay capabilities over the next year.
That's according to a Roy Morgan Single Source survey of more than 8000 interviews conducted in the six months to June 2014.
It found more than 1.5 million Australians intend to purchase an iPhone in the next twelve months.
"Those intending to purchase an iPhone are already familiar with making payments by mobile phone, with nearly one third of them (29.4 per cent) doing so in an average four-week period, so the new Apple Pay feature has the potential to impact adversely on fee revenue," according to a company statement.
"With the potential for banks to lose fee revenue, it is worth looking at the proportion of each of the major banks customers that intend to purchase the latest iPhone."
The survey found that 14.1 per cent of ING Direct customers intend to purchase a new iPhone over the next 12 months.
Of the four major banks, ANZ has the highest proportion of intenders with (9.7 per cent), followed Westpac (8.8 per cent), NAB (8.1 per cent) and The Commonwealth Bank (7.9 per cent).
As a guide to the potential spend on Apple Pay, it is important to note that those people intending to purchase an iPhone are not only already familiar with mobile payments (29.4 per cent do so in an average four week period), but have above average household incomes, according to a company statement.
The average household income of iPhone intenders is $130,000 per annum, well above the Australian of $97,000 per annum, and so have the potential for higher spending levels.
The average age of intenders is 37 years, much younger than Australian population average of 45 years.
This lower age is generally associated with an increased propensity to try new things and as a result it would be likely that these early adopters would be willing to spend more on the new system, depending perhaps on any costs involved.
Roy Morgan industry communications director, Norman Morris, said it was reasonable to expect that the new iPhone would increase mobile payments, particularly considering the fact that the early adopters of this device are already comfortable in making mobile payments and have above average spending potential.
“There is much discussion currently as to whether banks will suffer any material loss of revenue from interchange fees and the potential threat that these non-bank payment providers represent," he said.
“It is likely that both parties will be trying to retain and maximise revenue and as a result it is likely that ultimately any increase will be passed onto consumers and merchants.
"The extent to which this will be possible may be limited by the Reserve Bank of Australia which currently has a cap on the level of interchange fees and any negative customer reaction.”