Technology longevity, security and merchant acceptance are the main barriers for why the uptakes of payment innovations have been slow, according to a new study.

The HP-RFi Australian Payments Research reveals there is a cautious adoption to innovation in the payments market. For example, despite being the most mature of all payment innovations, only one-third of consumers own a contactless card and those who do rarely utilise contactless technology.

The report also showed that while Australia is still far from being a cash-free society, consumers are using cards more frequently for low-value transactions. In particular, scheme debit cards are replacing cash as a method of payment, with 48 per cent of consumers who are using less cash moving their spending to scheme debit. Moreover, with the impending roll-out of contactless technologies in key merchant categories, it is thought that cash will continue its downward trajectory.

As a result of the increase in card-based payments, there has been a slow decline in cheques. Of those surveyed, 31 per cent intend to writer fewer cheques in the next 12 months because they find them unnecessary, expensive and inconvenient.

The growth in the online shopping market has been substantially outpacing the growth of the traditional shopping market. In March 2012, 83 per cent of consumers had made a purchase online, making an average of 2.2 purchases with a total value of $151.96 per month. There are three key drivers of the increase in online shopping: an increase in the use of card-based payment methods, the strong Australian dollar, and quicker and more cost effective supply chains.

Although almost all consumers have adopted online shopping channels, a minority are still concerned about security and fraud protection.