The digital products offered by banks are becoming a key factor in customer acquisition and retention according to a study from Telsyte, which that found one in five Australian iPhone users are more likely to bank with a provider if it supports Apple Pay. This figure increases to 32 per cent for those who are also using an Apple Watch.
The study says surging mobile payments are “putting banks on notice” as phone users lock into ecosystems.
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It’s good news for ANZ, the only one of the big four banks to offer Apple Pay.
Westpac, CBA and NAB have instead chosen to build their own digital payment app. But Telsyte’s study suggests the trio may be at risk of missing out on business from the 8.6 million Australian iPhone users.
Sixteen per cent of Android users also said they are more inclined to bank with a provider that supports Android Pay. All four major Australian banks support Android Pay, although some do so via their own apps.
The research found that one in seven (14 per cent) customers have completed a mobile contactless payment transaction at a payment terminal in store at least once — an increase from eight per cent in 2016.
Telsyte’s Australian Smartphone and Wearable Devices Market Study 2018 found that smartphone users are now more loyal to their phones and using them longer. Apple maintained the highest rate of repeat purchases, with 85 per cent of iPhone users who purchased replacement phones in the second half of 2017 choosing to stick with Apple. The next highest was Samsung, with a repeat purchase rate of more than 70 per cent.
Whether a phone is Apple or Android is an increasingly important factor too. According to the study, a phone’s operating system is now the fifth most important consideration in new phone purchases — up from 10th in 2016.
“As the smartphone market has matured, platform loyalty is at an all-time high, creating almost two unique marketplaces,” said Foad Fadaghi, Telsyte Managing Director.
Flagship smartphones are more expensive than ever — Telsyte estimates the average cost of a smartphone in Australia has risen by more than 30 per cent since 2015. It means customers are holding onto them for longer, according to the study. The average replacement cycle is now closer to three years than the previous average of two years.
Telsyte estimates 4.8 million smartphones were sold in the second half of 2017, up six per cent from the second half of 2016. The analysts estimate there are now some 19.3 million smartphone users in Australia, with 8.6 million using iPhones and 10.3 million on Android (about 0.4 million use other platforms).