Customers want their shopping experience to be pleasant and the payment process to be painless – and so do business owners. Research shows many Australians have already ditched physical wallets and cash when they go shopping, so what’s next?
The way Australians prefer to pay for their shopping is keeping pace with the payment technology evolution. We were among the first to adopt digital payment methods, and we continue to be keen on technology that introduces greater ease and simplicity into the consumer experience.
Back in 2016, Australians had the highest use of ‘tap and go’ credit and debit cards in the world, according to global banking research firm RFi Consulting¹. But now many of us are moving on from carrying plastic cards.
A Marqueta consumer study from 2022 found that 69% of Australian respondents are now confident enough with digital wallets on their mobile devices to leave their physical wallet at home. Almost one-third (31%) of Australian respondents said they never use cash, and 53% said they used cash less since the COVID-19 pandemic².
Another secure cashless alternative is PayID, CommBank were one of the first to introduce in 2018. Businesses can give customers their PayID –ABN / ACN, mobile number or email linked to their bank account – and get payments made straight into their account in near real time. PayID as a proportion of all payments made in Australia increased from 12% at the beginning of 2021 to nearly 20% in October 2022, says the Australian Bankers Association³.
Making in-store shopping easier
Consumer demand for a pleasant, stress-free experience puts pressure on businesses to make in-store shopping and payments as simple as possible.
Self-serve checkouts, for example, arrived in supermarkets about 15 years ago to speed up checkout queues. But results are mixed. As any Saturday shopper will tell you, the queue for self-serve can also be long.
The next evolution is the in-store app. Retailers such as IKEA and Woolworths now have a ‘Scan & Go’ app operating in some stores, where customers scan goods through the app on their phone as they make their way through the store, then scan a QR code at a dedicated checkout at the store’s exit to pay.
But already there are some stores in the US and UK where shoppers don’t even need to scan their goods or unpack a trolley to pay for their purchases. Called “frictionless shopping”, it’s the ultimate grab-and-go for customers.
Is frictionless shopping the future?
Stores with frictionless shopping let customers enter, select their items, and walk out without the need to scan, queue, or check out. The process relies on computer vision AI technology to identify which products a particular customer selects. Payment can be charged in a variety of ways, from mobile apps to biometrics⁴.
This technology was pioneered by the Amazon Go store in Seattle, which opened in 2018. Aldi launched a trial checkout-free store in London at the beginning of 2022 as part of its ongoing testing of frictionless shopping⁵.
Frictionless retail may ultimately extend to every activity: transit, services, and venues, all with the same automated, contactless handling.
How can your small business keep up?
A recent Capterra survey found that 72% of Australian smartphone users would be interested in trying a ‘checkout-less’ store that works via an app⁶. And Coles has previously flagged the possibility of checkout-free supermarkets in Australia by 2030.
Frictionless shopping may be delivered first in Australia by the retail giants, but smaller businesses can already adjust their offering by using current technology.
Affordable but reasonably new point-of-sale technology, for example, can help make payments easier for customers. Smart, compact, portable payment terminals, such as CommBank’s Smart Mini, can check out customers anywhere in the store, removing the need for your customers to queue.
The app can also be customised for tipping and split billing, to cater for customer preferences.
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Things you should know
[1] ABC, Tap and go: Australians embrace contactless credit cards, 1 August 2016, Accessed 6 April 2020.
²Marqueta, 2022 State of Consumer Money Movement: What happens when the new normal becomes plain old normal, accessed 1 March 2023.
³Australian Banking Association, “Millions of Australians take up PayID to prevent scams”, 6 November 2022, accessed 11 April 2023.
⁴ PWC, Frictionless retail – the future of shopping, November 2022.
⁵ComputerWeekly.com. “Aldi launches grab-and-go test store in London”, 19 January 2022, accessed 11 April 2023.
⁶Capterra, Are Australian smartphone users interested in checkout-free shopping? 6 July 2022, Accessed 6 April 2023.
⁷SMH, Customers will just walk out’: Coles exec flags ‘checkout-free’ shopping within 10 years, 30 January 2020, Accessed 6 April 2020.
This article is intended to provide general information of an education nature. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. As this information has been prepared without considering your objectives, financial situation or needs, you should, before acting on this, consider its’ appropriateness to your circumstances. Interest rate information and predictions are subject to change depending on economic market fluctuations and conditions. Commonwealth Bank of Australia ABN 48123 123 124.
