Westpac predicts surge in contactless payments
7 April 2014
- Almost $3 billion in contactless transactions made via mobile forecast for 2015
- Latest payment innovation for small business customers.
Evolving customer preferences and new digital technologies are driving material changes in payments according to Westpac’s Chief Product Officer, David Lindberg.
Contactless debit cards have already been embraced by Australians with 60 per cent of all scheme debit card transactions in Australia now made using contactless technology1.
This trend will be further boosted by the growing availability of contactless payment technology on mobile phones, which allows customers to pay for goods and services by simply holding their mobile device to the contactless payment terminal.
According to data compiled by Westpac, Mr Lindberg estimates that around three million Australians will be making just under $3 billion worth of transactions via contactless payments on mobile devices in 20152.
Initially, the capability is being made available on the popular Samsung GALAXY smartphones, which run on the Android platform. Androids now make up over 50 per cent of the Australian smartphone market, with Apple smartphones at approximately 34 per cent3.
Mr Lindberg shared the prediction at a briefing today on Westpac’s outlook for the future of payments.
“Eighteen months ago, we could see the momentum building in contactless payments, the ability to take out your credit or debit card and tap it on a terminal and have the payment go through. It was about 18 per cent of all scheme debit card transactions in Australia4.
“In the last 12 months we've seen this figure skyrocket to 60 per cent. We've probably never seen a shift in customer preference or customer behaviour like that before, and Australia is leading the world in this trend.
“With contactless transactions now becoming available on people’s mobile phones, starting with the popular Samsung GALAXY smartphones, it’s going to make transactions even faster and more convenient for customers.
“Based on existing uptake of contactless card technology, together with customer usage of our mobile and online banking platforms, we anticipate that there will be around three million Australians making contactless payments using their mobile in 2015. In line with this, we believe that there will be nearly $3 billion worth of contactless mobile transactions made in 2015.”
Australians adopting contactless payments using their phones are most likely to use the functionality for payments of $100 or less, according to Mr Lindberg.
“We believe that low value cash transactions will gradually decline. Cash won’t disappear altogether, but when you’re buying your morning coffee, your lunch and your train pass, these will increasingly be paid for on your card or phone and therefore people won’t need as much cash in their wallets. This is a revolution.”
Westpac is to progressively roll out its new contactless payment functionality over the next few weeks, starting with the Samsung GALAXY S4 and S5 handsets. Payments will work for personal Visa and MasterCard®5 cards and will be accepted by Visa payWave and MasterCard PayPass™ terminals.
The handsets utilise Visa’s Mobile Provisioning Solution (VMPS), which enables customers to make secure contactless payments on their mobile using Samsung’s embedded Near Field Communication (NFC) technology.
At the briefing, Mr Lindberg also announced the launch timing for Westpac’s new small business payment solution, Mobile PayWay, which will available from May 2014.
“Mobile PayWay is the first of its kind from an Australian bank for small businesses who want peace of mind when taking payments on the go. Our small business customers told us that they don’t feel comfortable handing over their expensive smartphone to take payments from customers, as this generally also doubles as their personal phone. This device turns most Apple™ and Android phones into an acceptance terminal.
“The solution is a small, portable, EMV-compliant device for small business customers to accept payments from all cards. It’s Bluetooth enabled and works with both Apple™ and Android devices. This is a real breakthrough for small businesses.”
Notes to editors:
- Westpac customers will be able to use their mobile to pay wherever MasterCard PayPass™ and Visa payWave are accepted.
- Samsung GALAXY S4 and S5 devices will all support Westpac mobile payments, with the functionality to be rolled out progressively from April 2014.
- All Westpac personal Visa card or MasterCard®6 credit and debit cards will able to be used to make mobile payments.
- To make a contactless payment, customers simply wake up their screen and hold the back of their mobile to the contactless terminal, or they can choose from one of our other two usage settings ('Open App' or 'Open App & Sign In')
- Paying with a mobile is just as secure as a card, with all payments backed by Westpac's Fraud Money Back Guarantee7. For extra peace of mind, customers can choose to sign in to Mobile Banking every time they make a purchase. Customers can also disable mobile payments in the phone’s NFC settings at any time.
- Mobile payments are managed through Westpac's mobile banking app. The new 'Pay' feature allows customers to select which of their cards they use to make a payment and change their usage settings.
1 According to internal Westpac Group and industry data
2 Based on an assumption that consumers will spend approximately $15 per transaction
3 Kantar Worldpanel ComTech February 2014
4 According to internal Westpac Group data
5 Subject to final certification approval from MasterCard
6 Subject to final certification approval from MasterCard
7 Cardholders will be reimbursed for unauthorised transactions provided the cardholder didn’t contribute to the loss and notified Westpac promptly. Full details of when cardholders may be liable are contained in the card account terms and conditions.