October 28th, 2013 by Elma Jane
With banks and shops starting to let customers pay by tapping their smart phones on terminals in stores, the future of plastic credit cards is looking shaky.
MasterCard, which has teamed with Coles and CommBank on these ventures, yesterday said Australians were rapidly embracing contactless payments using PayPass and rival Visa’s payWave. At Coles, six out of 10 MasterCard and Visa payments were contactless.
MasterCard head of market development and innovation for Australasia said three out of 10 MasterCard terminal payments were contactless and there were now more than 175,000 terminals nationwide that could accept them. More than 10 million MasterCards in Australia could make contactless payments.
An EMV (Europay, MasterCard and Visa) standard meant all terminals were capable of handling different brands of contactless payments.
The first stage of the contactless payments or “tap and go” revolution began with Visa payWave and MasterCard PayPass in Australia and the first institution to make contactless payments available locally was the Commonwealth Bank in 2006.
The next stage is to use smartphones rather than just plastic cards for contactless payments. Customers still use their Visa and MasterCard accounts, but the transaction is effected using a Near Field Communication sticker placed on the back of the phone, or an embedded, secure NFC element inside modern Android smartphones.
In Europe, NFC-enabled watches, wristbands, key rings and fobs also were being used for contactless payments and there was no reason this couldn’t happen here.
Visa said it had made a “significant investment” in a mobile NFC ecosystem.
“Visa is working closely with partners like Samsung, Vodafone and Optus on a range of mobile payment solutions that use the secure element and prepaid SIM models.”
CommBank, which previously enabled contactless payments from an iPhone housed in a special case, last week said it would let customers pay directly from their Apple phone using an NFC sticker, and from newer Android phones with embedded secure NFC technology.
The new facility, to be rolled out in the current financial year, is part of a revamp of the bank’s smartphones apps.
Coles said contactless payments had increased in the past year by more than 70 per cent while CommBank’s volume of contactless payments had increased six fold in 12 months. Westpac said it was piloting an Android mobile contactless payment application and was also investigating smartwatch payments.
“We also believe that the next big trend after the rise of mobiles and NFC in Australia will be mobile checkouts, where shoppers purchase products and have them delivered within two or three clicks,” a spokeswoman said, and the moves were “as big a market shift as we’ve ever seen”.
Coles also announced a trial of its own contactless payments technology using NFC stickers. Funds would be drawn from Coles Rewards MasterCards. Some 5000 mobile phone tags would be issued in a trial.
ANZ said it was continuing its trial of a mobile wallet for Android phones begun last year, ahead of making the solution available to customers.
“Our NFC pilot with Samsung and Optus is tracking well and we’re also investigating other payment options such as QR codes,” an ANZ spokesman said.
“Given the fragmentation of the market, we will continue to monitor developments before finalising how we will bring a viable mobile wallet solution for our customers to market.”
St George Bank chief information officer said his bank planned to have a contactless phone payments solution in the market “sometime in 2014”.
The bank has previously been reported to be looking at payments via the Pebble and Samsung smart watches.
National Australia Bank, which unveiled its peer-to-peer payments app, NAB Flik, last month, said it was watching how the contactless payments market developed with “less focus on being first to market and more focus on being best in market.”
The Australian reported last month that Apple and PayPal were exploring an alternative to NFC-enabled contactless payments called iBeacons. When you pass close to a store in a shopping centre, a beacon will detect your phone’s presence and automatically alert you to signature items for sale and specials, or offer other information to lure you inside, and process payments.
CommBank last week told The Australian it was looking at iBeacons technology.
Posted in Credit card Processing, Electronic Payments, EMV EuroPay MasterCard Visa, Near Field Communication, Visa MasterCard American Express Tagged with: accounts, Android, banks, checkouts, contactless, embedded, EMV, EuroPay, fobs, Iphone, MasterCard, mobile, mobile wallet, Near Field Communication, nfc, optus, payments, paypass, paywave, phone, plastic credit cards, prepaid, process payments, qr codes, Samsung, secure, shops, sim, smart phones, Smartphones, smartwatch, sticker, store's, Tags, tap and go, tapping, terminal, terminals, transaction, visa's, vodafone
