The landscape has definitely changed for the paying of levies since StrataPay started in 2002.
It is not surprising that we are seeing a rapid increase in BPay, EFT and Direct Debit and rapid decrease in cheques as this follows the trend of all consumer payments according to an article published by the Reserve Bank of Australia, ‘The Changing Way We Pay: Tends in Consumer Payments, June 2014 (http://www.rba.gov.au/publications/rdp/2014/2014-05/ accessed 6 September 2016). What is surprising however is still the number of people who choose to pay over the counter at Australia Post and pay over the phone by credit card. Even though these numbers are decreasing they still remain significant enough to continue to offer this service.
StrataPay has been offering an integrated levy collection system for bodies corporate and owners associations for nearly fifteen years, offering eight convenient payment methods for paying strata levies.
Having such a diverse selection of payment options gives owners the flexibility to pay using a channel which is most convenient for them.
There has been a steady growth in payments coming through StrataPay which is represented below. StrataPay is a major supplier in the strata payments services industry, processing over $1.6B in payments annually.
StrataPay has analysed the payment behaviour for over 1.4 Million payments made in the previous year and broken down the major channels as follows:
Offering all channels is still essential at this point in time to cater for the varied needs of owners payment habits but this may change in the future especially as some of these payment channels further decline.
The following graphs represent the changes in payment habits with levy payments paid through StrataPay over the past six years.
This data shows a significant decrease in cheques and phone payments by credit cards and an increase in direct debits and web payments by credit card. The decrease in cheques matches closely with the nationwide statistics from the Australian Payments Clearing Association (APCA) which have shown an average decrease in volume of cheques each year of about 14%. (www.apca.com.au/payment-statistics/transaction-statistics/cheque)
There has also been a steady increase in BPAY payments now accounting for 58% of all payments and a slow decrease in Australia Post payments but still accounting for 13% of payments.
While there has been a trend away from over-the-counter payments there is still a considerable percentage of owners choosing to use the counter service at Australia Post. This percentage represents more than one in eight owners paying using this method.
So what is predicted for the future of strata levy payment methods?
Based on the average decline and usage over the past six years StrataPay predict cheques will be non-existent within the next three years and account for less than one-percent of payments.
Australia Post will still remain in the top three payment methods but gradually decline over the next five years to be eventually overtaken by Direct Debit and EFT payments.
Even with the popularity of web payments it is still surprising to see 40% of all credit card payments are made over the phone. This could be attributed to the mistrust and insecurity some people experience with placing their credit card details online. For this reason, this method of payment will probably remain for quite a while.
Based on trends over the past six years we should see continued growth in some channels while depletion in others.
While BPAY continues to gain share from cheques and Australia Post the fastest growing channels by percentage over the 2010-2016 period were Direct Debit and EFT.
This is not surprising as direct debit has consistently been shown to be the fastest growing transaction type among those facilitated by the Australian Payments Clearing Association (APCA), ahead of EFTPOS, credit cards and cheques. EFT may also be following a similar growth trend in the industry as APCA’s statistics showing Direct Credit volume (for direct entry transactions) as the second fastest channel. (www.apca.com.au/payment-statistics/transaction-statistics/direct-debit-direct-credit)
As a channel, BPAY is starting to slow down in growth, while some other channels are still increasing exponentially.
As a major supplier in the payments sector, StrataPay will continue to offer services which meet the needs of owners and strata management businesses.
As an owner does your Body Corporate or Owners Corporation provide you with your preferred payment method? StrataPay has been helping the strata industry to provide options and convenience to owners and strata managers alike. Please feel free to talk to us about how we can help your Owners Corporation or Body Corporate now.
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