Nearly 40 per cent of ‘Gen Y’ consumers use digital means to make everyday purchases, a survey commissioned by Bankwest has found.
Defined by Bankwest as payments made with a digital card on a smart device, digital payments were most commonly used by the youngest cohort in the survey, although 23 per cent of Gen Xers and 11.5 per cent of Baby Boomers made purchases using this method.
Of those that regularly use digital cards, around 40 per cent across all age groups used them for more than half of their everyday purchases.
Close to half of digital card users surveyed said their use of the payment method had increased over the last 12 months.
The survey of more than a thousand people living in Victoria and New South Wales was conducted by CoreData in February.
A similar, but much larger survey (50,000 consumers) conducted by Roy Morgan and published in January found 6.8 per cent of Australians of all ages had used non-bank digital payments, while 5.8 per cent had used the banks own mobile payments systems.
The figures will be heartening for Bankwest itself, which in mid-2018 Bankwest unveiled its plan to slash its physical branch footprint on the east coast of Australia and increase its focus on digital channels.
Bankwest’s executive general manager, technology and transformation Andy Weir said in June last year the bank’s digital focus was “absolutely about survival”.
Bankwest has offered customers Google Pay (previously known as Android Pay) since 2016, and Apple Pay since January this year. It does not offer Samsung Pay, despite its parent company Commonwealth Bank of Australia offering the Samsung digital wallet to cardholders.
The bank also allows for payments with digital cards as part of its mobile app.
In 2018 the bank launched a ring – dubbed Halo – that enables users to make ‘tap and go’ payments. Earlier this year it revealed it had sold the $39 ring to around 15,000 of its 1.1 million customers. Halo ring-wearers used the device for 28 per cent of their purchases in 2018, according to the bank.
Spending what you don't have
Using digital means to make payments did, however, come with a downside, the Bankwest survey respondents reported.
Across all age groups, but particularly Gen Y, respondents said technology had “made it easier to spend money you don’t have”. More than 90 per cent of Gen Y, 85 per cent of Gen X and 78 per cent of Baby Boomers agreed with the statement.
A similar number agreed that “technology has made it easier to spend without really thinking about it”.
“When new innovations emerge, people often jump in quickly to integrate them into their lifestyles, but they don’t always consider where that can lead them,” said Bankwest executive general manager, customer solutions and insights Pieter Vorster.
“Customer needs are changing rapidly, and we need to ensure we’re working to protect and enhance customers’ financial wellbeing as they adopt these emerging technologies,” he added.
Like many of its rivals, Bankwest offers an expenses tracker and budgeting tool online and via its app.
“The silver lining, especially for young Australians, is quick adopters are also open to innovations to assist them, if money management tools are simple and easy to use. That’s where the supportive role of financial institutions is so significant, particularly through encouraging customers to use tools within their banking apps, which are popular with Gen Y,” Vorster said.
“Banks have an opportunity to better connect their customers with these tools, such as payment alerts and credit limit adjustments, so they can use tech safely, while spending within their limits,” he added.