Tap and pay and where did it go? Is it to easy to spend our cash?

We, as a customer owned bank, are acutely aware that there are a number of Australian’s facing financial struggles and difficulties. The Customer Owned Banking Association (COBA) has recently conducted research to help identify spending habits and ways to help protect vulnerable Australians, and those in financial hardship.

Tap and pay in store with a phone

It may not come as a surprise to hear that paying via tap-and-go is the most popular method now, cash is no longer king in the world of payments. 

Simplicity and ease of payments certainly has its benefits, however the research is also suggesting that this trend is disconnecting consumers from the value of money and driving risky spending habits – especially for those facing financial difficulties.

According to the research, those who are facing financial difficulty are more likely to overspend than those who aren’t. 

Key findings:

  • The research indicates that those who were financially struggling or in serious difficulty were more likely than those who were financially comfortable or secure to overspend (44% vs. 35%). This group also appear to find it harder to keep track of spending (39% vs. 33%), or to avoid using tap-and-go options (35% vs. 26%). 
  • It seems there is an age divide in the uptake and impact of tap-and-go payments. More young people aged 18-34, compared to people aged over 55, agreed that tap-and-go options make it easier to overspend (46% to 27%), and harder to track spending (42% to 26%).

Spreading the cost:

There is also evidence from the study that those already struggling are more frequently using buy now pay later (BNPL) services. 29 per cent of those financially struggling or in serious difficulty are using BNPL services at least once a month. 

Michael Lawrence, CEO of COBA said “Technologies such as digital payments services offer many benefits for customers, including a frictionless and convenient experience. However, as with any new technologies, understanding the impacts on consumer behaviour is essential to ensure consumers who are most vulnerable are supported. 

“Customer-owned banks serve more than five million Australians and are committed to ensuring customers have access to services, products, and advice that have been built around a deeper understanding of nuanced vulnerabilities or financial challenges. 

Heritage is committed to our customers and their financial health – particularly those who are vulnerable and in financial distress. If you are in need of support, chat to us online, contact us over the phone 24/7 or drop into your local branch.

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