ANZ, one of four major Australian banks, has seen a “higher propensity” for users of Apple Pay to adopt other bank services, like mortgages, according to The Sydney Morning Herald.
ANZ WILL LIKELY CONTINUE TO BENEFIT FROM THEIR PARTNERSHIP
- ANZ saw a near-immediate positive response from its partnership with Apple Pay.Demand for deposit accounts “skyrocketed” almost immediately. Since then, 20% of the bank’s customers have reportedly uploaded their payment information into the service, according to The Australian.
- Additional engagement from ANZ’s Apple Pay users could make the service a worthwhile investment. Mobile banking users have lower attrition rates and often consume more banking products on average. ANZ’s observation indicates that the impact of Apple Pay could be similar. In addition, the services that users are seeking are likely among banks’ most lucrative. The revenue that comes in from increased engagement with those offerings could help make up for the fee that banks reportedly pay Apple on a per-transaction basis when users pay with the wallet.
THERE IS STILL OPPORTUNITY FOR BANKS TO PUSH THEIR OWN PROPROETARY
Even though there is still opportunity for banks to push their own proprietary mobile wallets, ANZ’s success could show that working with Apple may prove to be the better option. Australia’s other major banks are still fighting for the opportunity to jointly negotiate with Apple in order to gain access to the necessary hardware to build their own proprietary wallet for iPhones. It’s likely such a product would see adoption — Android-based bank wallets are common in Australia, and 75% of users trust their banks most to provide mobile wallets.
But as ANZ has shown, partnering to use an established wallet could be equally or more lucrative because of boosts from increased engagement, and wouldn’t involve the costs of creating or hosting a proprietary wallet. That could ultimately benefit Apple, because if more banks opt to engage with the wallet, it could extend its reach in the country and capture a larger share of the total Australian interchange market, which is worth about $2 billion, through increased wallet usage.
Mobile payments are becoming more popular thanks to services such as Apple Pay, but they still face some high barriers, such as consumers’ continued loyalty to traditional payment methods and fragmented acceptance among merchants. But as loyalty programs are integrated and more consumers rely on their mobile wallets for other features like in-app payments, adoption and usage will surge over the next few years.
BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on mobile payments that forecasts the growth of in-store mobile payments in the U.S., analyzes the performance of major mobile wallets like Apple Pay, Android Pay, and Samsung Pay, and addresses the barriers holding mobile payments back as well as the benefits that will propel adoption.
Here are some key takeaways from the report:
- In our latest US in-store mobile payments forecast, we find that volume will reach $75 billion this year. We expect volume to pick up significantly by 2020, reaching $503 billion. This reflects a compound annual growth rate (CAGR) of 80% between 2015 and 2020.
- Consumer interest is the primary barrier to mobile payments adoption. Surveys indicate that the issue is less the mobile wallet itself and more that people remain loyal to traditional payment methods and show little enthusiasm for picking up new habits.
- Integrated loyalty programs and other add-on features will be key to mobile wallets taking off. Consumers are showing interest in wallets with integrated loyalty programs. Other potential add-ons, like in-app, in-browser, and P2P payments, will also start fueling adoption. This strategy has been proved successful in China with platforms like WeChat and Alipay.
In full, the report:
- Forecasts the growth of US in-store mobile payments volume and users through 2020.
- Measures mobile wallet user engagement by forecasting mobile payments’ share of their annual retail spending.
- Reviews the performance of major mobile wallets like Apple Pay and Samsung Pay.
- Addresses the key barriers that are preventing mobile in-store payments from taking off.
- Identifies the growth drivers that will ultimately carve a path for mainstream adoption.
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