Young Kiwis demand the next wave of payment innovation
Kiwis also want digital payment methods they can trust. More than 56% of New Zealanders said security was their main consideration when choosing a payment option.
More New Zealanders than ever use digital payments to purchase everyday items, as we ditch banknotes and coins in favour of more modern methods. According to payment giant Mastercard’s New Payments Index 2022, Kiwis have an 86% uptake of digital payments, comparable with the rest of the Asia Pacific Region and ahead of the global average, despite our options being more limited than other countries.
The Covid-19 pandemic was the catalyst for an unprecedented and rapid uptake of digital payment options over the past two years. Mastercard’s latest research, a global consumer survey spanning 40 countries, suggests the trend toward digital payments is permanent, with 48% of respondents cutting back on their use of cash over the past year.
Tech advances have changed how we shop, save and communicate, and younger generations would like to see further advances, as NZ payment innovation lags behind other nations.
Millennials (people born between the early 1980s and mid-1990s), and Generation Z (those born just after the mid-1990s) are looking for ease of use and innovation in their payment options to match the rest of their increasingly digital lives. According to Mastercard’s study, 48% of New Zealanders said ease of use was the biggest factor in their choice of payment method, compared with a global average of 37%.
Kiwis also want digital payment methods they can trust. More than 56% of New Zealanders said security was their main consideration when choosing a payment option. The factor was cited as the biggest overall influence on payment choices.
The payments report also underlined privacy concerns about biometric identification. A total of 60% of New Zealanders said biometrics were easier to use than PINs and passwords, while 59% said biometrics were more secure than traditional identification methods. Yet only 37% felt comfortable sharing biometric data, and 72% were concerned about where their data would end up.
Mastercard’s report also looked at new solutions such as cryptocurrency and Buy Now, Pay Later (BNPL) platforms. While offering more options to NZ shoppers, consumers have less faith in the payment methods and want trusted providers to step in with alternatives.
While BNPL awareness is high, comfort is low. Roughly 39% of Kiwis said they were comfortable using BNPL compared to an average of 50% across the Asia Pacific region.
NZ Consumers are drawn to BNPL offerings for their low and no-interest payments. Roughly 43% of Kiwis said they were likely to use BNPL in the next year, but a majority would feel safer if BNPL was offered by a major payment network (58%) or their existing bank (51%).
According to Ruth Riviere, country manager for New Zealand and Pacific Islands at Mastercard, there is a clear appetite for new payment options in Aotearoa.
“New Zealanders are embracing new ways to pay, and this research highlights the desire for further innovation in the payments space,” Riviere says. “The research has also reinforced the importance of building trust with consumers to support the adoption of new technology. Mastercard is focused on providing Kiwis with the ability to pay when, where and how they like by offering safe, secure and seamless payment options,” Riviere adds.
With a need for fresh innovation and thinking, what will bring about the long-awaited advances in the NZ payments space?
Open Banking is on the horizon in New Zealand, and is poised to unleash a new wave of innovation in the payments sector. Countries that have turned to Open Banking models have witnessed an increase in digital payment options and innovation in the space.
Mastercard’s worldwide partners, from tech giant Apple to fintech leaders Revolut and Monzo, are building trusted payment solutions that can deliver innovative, secure, and seamless customer experiences. These international innovators highlight how much further we can go — and how much better our payment experiences will become.
Read more in the Mastercard Asia Pacific New Payments Index, here.