Australian shoppers prefer to use non-bank cardless payments like Apple Pay and Google Wallet over the banks own offerings, according to a report from Roy Morgan.

The research firm believes incumbents will need to collaborate more with fintechs and third parties to “keep up” in the evolving digital payments market.

However, some of Australia’s biggest banks are currently locked in a stalemate with Apple over the use of its payments service. So far, apart from ANZ, Australia’s big banks are yet to offer Apple Pay, despite its influence on banking choice, following an ACCC ruling they can not team up to negotiate an Apple Pay deal

Instead, many Australian banks are relying on their own digital payment services. The Apple Pay holdouts – CommBank, Westpac and NAB – have also collaborated to develop their own digital payment app – Beem.

But just 6.4 per cent of Australians have used one of the banks contactless payment options in the last year, according to the Roy Morgan research. Non bank options like Apple Pay are only slightly better at 6.5 per cent.

The research is based on over 50,000 face to face consumer interviews, the results of which are contained in the Roy Morgan Digital Payment Solutions Currency Report.

While fintechs have surpassed banks, both are struggling to gain traction on emerging digital payments, despite relatively high levels of awareness, according to the report.

Only around one in ten Australians used a tap and go payment system in the past year and just 6.7 per cent have used a buy now pay later service like AfterPay.

However, more established digital payments still remain popular, and two continue to dominate. More than half (52.9 per cent) of Australians used BPay in the past year while 42 per cent have used Paypal, according to the report.

An evolving market

According to Roy Morgan CEO, Michele Levine, Australian love digital payments and the market is “evolving quickly”.

“The solutions being developed by the new market entrants and the incumbents not only help the consumer with a quicker and more convenient way to pay, but provide businesses with rich data on what the consumers are purchasing, how they are purchasing it, and where,” Levine said.

The Roy Morgan chief also expects consumer expectations around digital payment capabilities will continue to rise.

“People will come to expect the minimum amount of effort when making a payment and the industry will need to adapt to these changing expectations by providing more innovative and seamless solutions. 

“Traditional financial institutions may need to collaborate with Fintechs and other third parties to keep up with the rapidly changing digital payment landscape.”

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