Research by UK payments company GoCardless found that 46 per cent of Australian consumers were more likely to choose bank debit for household bills and instalments.
This was nearly double the number who were likely to choose to pay using their digital wallets. In fact, Australia had the highest number of ‘very likely’ responses for Bank Debit out of all surveyed markets.
The research is good news for banks after a Morgan Stanley analysis predicted last week that digital wallets could steal 30 per cent of major banks’ revenue.
The Morgan Stanley analysis said it was likely that digital wallets would replace banking apps as consumers’ preferred payment channel.
Meanwhile GoCardless found that for subscriptions less than 40 per cent of Australian consumers were likely to pay using a digital wallet with more consumers opting for bank debit.
General Manager of GoCardless Australia and New Zealand Carolyn Breeze said it was curious that direct or bank debit was so high given the options available.
“Despite the wide choices of payment methods available today, consumers continue to choose to use bank debit as a payment method because it’s the one they know and trust,” she said.
Australians particularly enjoyed direct debit, said Ms Breeze, due to the convenience and there was the ability to set-and forget.
“Bank debit offers a set-and-forget payment option. Additionally, unlike other payment methods, the merchant fees that are charged for direct debits are lower; and this benefit is often passed on to customers,” she said.
Digital wallets offered consumers a convenient way to pay without the physical card but few consumers had adopted this as a method, said Ms Breeze.
“For banks, it signals that their focus should be to offer the payment method that consumers demand the most. This is indicative of consumers’ preference to pay using bank debit, because it’s more convenient,” she said.
Ms Breeze said that she did expect the trajectory of disruption to continue and that would see Australians adopt and use new methods of payment.
“As consumers continue to change the way in which they shop and pay for things, there is more importance placed on the need for payment methods to be flexible and offer value. Within this context, we are seeing the growing prevalence of the subscription economy,” she said.
Eliot Hastie is a journalist on the wealth titles at Momentum Media.
Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.
Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).