Consumer research: cards still on top but digital options gaining ground
27 Aug 2024
Physical bank cards are still New Zealanders’ favourite way to pay, but digital wallets are gaining ground on traditional payment methods, according to consumer research undertaken by Payments NZ.
Sixty-seven percent of those surveyed said they reach for their debit, credit and EFTPOS cards when making an everyday purchase, down from 77 percent in 2022.
Digital wallets, which include options like Apple Pay and Google Pay, were the go-to option for 15 percent of people, compared to 10 percent using smartphone payments two years ago.
The full consumer research report is available for download here.
Payments NZ chief executive Steve Wiggins says the research, based on surveys of more than 1000 people, shows changing trends in spending behaviour.
“Cards are still at the core of people’s payments experience, but the options available are much broader than before, and we’re seeing consumer activity and expectations reflecting this,” Wiggins says.
“We’re not seeing a revolution in preferences, but the days of ‘cash or card’ are firmly in the past. So it’s important businesses make sure they’re on top of how their customers want to pay and what they might expect from payments experiences in the future.”
On the open banking front, the number of consumers comfortable with sharing data with a third party has grown steadily – now at 37 percent of respondents, up from 27 percent in 2022 and 16 percent in 2020.
“It’s encouraging to see consumer comfort with data sharing outweighing discomfort,” says Mr Wiggins.
“However, consumers naturally want greater assurances around privacy, security, trust and individual control over data, and we need to keep delivering on those areas as open banking grows.”
Māori consumers appear ahead of the curve in adopting digital payments habits, with a higher use of digital wallets for everyday purchases and a higher level of comfort with data sharing for open banking than the survey average.
In the meantime, consumers’ interest in what open banking products might do for them appears to have shifted in line with the economic environment.
Tools to manage bill payments, sign up easily for new services, and speed up loan and finance approvals all showed increased appeal, while interest in an app for splitting restaurant or bar bills with whānau and friends – one of the most popular open banking concepts in past surveys – has fallen by 10 percent since 2022.
Online marketplaces like TradeMe and Facebook Marketplace are exceptions to the digital trend. Forty-six percent of respondents preferred to deal in cash for marketplace purchases, with 23 percent preferring bank transfers.
General satisfaction with bank payments was high, with 88 percent of respondents happy with the speed of making bank payments and 86 percent happy with the speed of receiving them.
Last year’s move to seven-day bank payments was also well received, with 88 percent of respondents aware of the change and more than half saying they’d seen a direct benefit.
Real-time payments were the most popular of several future payment concepts canvassed in the survey, with 76 percent of respondents finding them appealing.
“It’s great to see consumers benefitting from seven-day payments as well as businesses, as well as high satisfaction with bank payments overall,” says Mr Wiggins.
“We use this biennial research to keep our finger on the pulse and inform our thinking around innovation in the industry. We know there’s a lot to gain for New Zealanders as we continue to invest in the payments system.”
This year’s research also showed a shift in attitudes to contactless payments, with 28 percent saying they only used this payment method when there were no surcharges – double the proportion who said so in 2022. Contactless payments remained popular overall, with 88 percent of respondents using them in the past year.