The mobile payments landscape is rapidly beginning to change and contactless payment systems are becoming part of everyday life in Australia. Many of the nation’s banks have already successfully implemented various near field communication (NFC) contactless card payment systems, and there have also been trials of NFC contactless mobile payment solutions.
In fact, Australia is one of the leading countries in contactless payments using debit or credit cards. According to data from the banking group Westpac, 60% of all Visa and MasterCard debit card transactions are contactless payment transactions. It is only natural that this technology is being taken forward and made available on mobile phones too.
Westpac at the forefront of mobile contactless payments
In August 2012, Australian banking group Westpac carried out an initial three month trial of an innovative new mobile contactless payment system for Android phones in cooperation with MasterCard, which allowed customers to pay for goods in stores by tapping their mobile phone on an NFC payment terminal.
This trial has been further developed together with Visa, and Westpac finally launched its fully fledged mobile contactless payment system in April 2014. Initially, customers with Galaxy S4 and S5 mobile phones will be able to pay for goods at any Visa payWave or MasterCard PayPass terminals with just a quick tap-and-go.
Using the system will require customers to download the Westpac mobile banking application and makes use of the in-built NFC hardware in the Galaxy S4 and S5 handsets, so does not require any NFC stickers or special cases.
ANZ and Vodaphone NFC trial
In 2012, ANZ was collaborating with Vodaphone and Visa in trialling an NFC mobile contactless payment solution called Vodaphone SmartPass, based around an NFC-enabled SIM card using a Visa payWave terminal.
Visa payWave terminals are already widely in use at various stores because adoption of contactless debit cards has also been rapid. The SmartPass system worked in much the same way, i.e. just placing or tapping the phone by the reader.
The trial involved an Android phone with an NFC SIM card and also Vodaphone’s SmartPass application. Users also needed a Visa reloadable prepaid card, provided by ANZ, which they had to be topped up first.
Commonwealth Bank’s Kaching application
In 2011, Commonwealth Bank launched its application called Kaching for both Apple and Android phones that features a variety of functions. The version for Apple allows users not only to make contactless payments but users can also send payments to a mobile number, email address and even to Facebook friends. The NFC element is enabled through a special case that has to be purchased separately.
The Android version of the application does not allow contactless payments to be made, however, despite the fact that many Android phones already have an NFC chip.The mobile contactless payment system uses MasterCard’s PayPass system.
However, CommBank announced in October 2013 that the bank will phase out Kaching and replace it with a new app that will make greater use of NFC technology.
Cloud-based innovation around the corner
2014 will see the launch of a newcomer to the mobile contactless payment sector with Cuscal, a leading transactional banking services provider, and Visa together with the KitKat mobile operating system for Android.
The system is based on Host Card Emulation (HCE) and turns the mobile phone into a contactless payment device. In effect the secure element required to make and process transactions is moved from, for example, the SIM card to the operating system and payments data is stored in a secure cloud.
The new system is being trialled but it heralds an exciting new dawn in mobile contactless payments.