Myer launches Android and Apple Pay

From Fintech Business.

Myer customers will be able to use Android Pay and Apple Pay to make purchases in store via the launch of a new credit card, the Myer Credit Card, issued by Macquarie Bank.

Using Visa payment technology, Myer shoppers will be able to pay for purchases from their digital wallet on their smartphone through the Myer Credit Card App.

Commenting on the launch, Myer chief executive and managing director Richard Umbers said he was excited to be bringing Android and Apple Pay via the Myer Credit Card.

“The card will provide our customers with an easier way to pay and reward them for their loyalty,” he said.

“We are delighted with our partnership with Macquarie and Visa, which will further accelerate the growth of Myer’s digital capability.”

Macquarie head of banking and financial services group Greg Ward said the company is delighted to have been chosen as the card issuer.

“For many years we have offered credit card products directly and through white label arrangements, and this is the latest step in supporting innovative digital banking solutions for Australians,” he said.

Customers will also be able to accumulate Myer one shopping credits on the credit card, a spokesperson for Myer said.

Visa group country manager for Australia, New Zealand and the South Pacific Stephen Karpin said it was an “exciting time” for Australian retail.

“With digital technology driving new and imaginative commerce experiences … how people pay is at the heart of these experiences,” he said.

“It’s for this reason we’re delighted to be working with Myer and Macquarie Bank to bring the future of commerce to Australians today.”

ANZ to offer payments on Fitbit Ionic

ANZ has announced it had partnered with leading global wearables brand, Fitbit, to offer customers the ability to make payments on the run through Fitbit Ionic, the ultimate health and fitness watch.

From today, ANZ’s Australian customers will be able to load their eligible Visa debit or credit cards through the Fitbit app so they can make simple and more secure purchases on the go with a Fitbit Ionic.

Commenting on the new partnership, ANZ Managing Director Products Bob Belan said: “ANZ is committed to being at the forefront of new payment experiences so we’re pleased to be offering our customers a convenient way to pay on the go with their Fitbit Ionic.

“We’re excited to work with an innovative company like Fitbit to offer our customers products and services that are simple to use and helpful in an increasingly digital world.”

“Having done a lot of work with mobile payments in the past, we are well-positioned to establish more partnerships at a faster rate to meet the evolving needs of our customers.”

Customers will need a Fitbit account and an eligible device to pair with their Android or iOS smartphone so they can access the payments service via the Fitbit app. Once set up with their debit or credit card, they simply need to tap the device at any contactless merchant terminal to make a payment.

The announcement comes after ANZ successfully launched mobile payments partnerships with several other companies in the past 18 months, including the world’s largest smartphone manufacturers and software providers.

Suncorp Introduces Samsung Pay

Suncorp has announced that customers with a Suncorp Clear Options Credit Card can now access Samsung Pay.

Suncorp Executive General Manager Deposits & Investments, Bruce Rush, said the introduction of Samsung Pay was the first step in Suncorp’s plan to enhance its digital payment offering.

“As we move to an increasingly cashless society, we know that our customers need more efficient and sophisticated technology, including digital wallets,” Mr Rush said.

“From 27 September, 2017 all customers with a Suncorp Clear Options Credit Card, and compatible Samsung device, will have the option to use Samsung Pay.

“We will continue to invest in our payment technologies and are committed to delivering new services that our customers want and need.”

Samsung Pay is a secure and easy-to-use mobile payments service available on compatible Samsung devices, including the recently released Galaxy Note8. Head of Mobile Payments at Samsung Electronics Australia, Mark Hodgson, said Suncorp and Samsung are committed to improving customer experience through innovation.

“With Samsung Pay, Australians are provided with the convenience, security and choice to undertake everyday tasks when transacting,” Mr Hodgson said. “In addition, Suncorp Clear Options Credit Card cardholders can now benefit from Samsung Pay’s unique features, such as our three-layered security system, and can enjoy using the service anywhere you can pay with a contactless credit card.”

Access to Samsung Pay only applies to Suncorp Clear Options Credit Card cardholders and does not include Suncorp debit cards.

Cash Still In The Payment Mix

A research discussion paper from the RBA – “How Australians Pay: Evidence from the 2016 Consumer Payments Survey” –  provides further evidence of the migration to electronic and digital payment mechanisms, but also underscores that cash remains a critical payment mechanism for many, especially in the older age groups. Given the fast adoption of mobile payments, the 2016 data will already be out of date!

Using data recorded information on around 17 000 day-to-day payments made by over 1 500 participants during a week, the report shows that Australian consumers continued to switch from paper-based ways of making payments such as cash and cheques, towards digital payment methods (particularly debit and credit cards). Cards were the most frequently used means of payment in the 2016 survey, overtaking cash for the first time. Contactless ‘tap and go’ cards are an increasingly popular way of making payments, displacing cash for many lower-value transactions.

 

Despite these trends, cash still accounts for a material share of consumer payments and is intensively used by some segments of the population.

Payments using a mobile phone at a card terminal are a relatively new feature of the payments system and this technology was not widely used at the time of the survey. However, consumers are increasingly using their mobile phones to make online and person-to-person payments. Similarly, consumers are using automatic payments, such as direct debits, more frequently.

 

ANZ is the first Big Four bank on both Samsung Pay and Apple Pay

From Business Insider.

ANZ has joined Samsung Pay, becoming the first of the big four Australian banks to be on all three major digital wallets.

The bank had already been the only one of the majors to be on Apple Pay and was already available on Android Pay.

“Samsung has strong device market share in Australia and many of our customers love its open approach to technology, so it made sense for us to work with them in bringing this convenient and secure mobile payments solution to our customers,” said ANZ product managing director Bob Belan.

ANZ joins Westpac and a range of smaller institutions on the Samsung platform, which allows contactless payments through selected Samsung smartphones and Gear smartwatches.

The Commonwealth, NAB and Westpac have resisted getting onto Apple Pay while they, along with some smaller banks, fought to negotiate collectively with Apple in order to gain access to the iPhone’s near-field communications (NFC) chip which would allow their own apps to make contactless payments.

Apple has denied the request, arguing access would be a security risk and accusing the banks of acting as a cartel to “free load” from its technology.

Meanwhile, former Google Australia boss and now ANZ digital banking head Maile Carnegie said in February that her company had no hesitation in joining Apple Pay.

“People were asking specifically for Apple Pay. They were asking specifically for Android Pay. And if that’s what they want, we needed to figure out the most pragmatic way of giving that to them,” she said at the time.

 “We could look back and say, ‘I wish that was us, I wish they wanted our digital wallet as much as they wanted [Apple Pay]’. But they didn’t.”

Belan also stuck to a similar line this week regarding Samsung Pay, citing customer demand.

“At ANZ, we believe our customers are best placed to make their own choices about which digital wallet works best for them,” he said.

The addition of ANZ now sees Samsung Pay have more than 40 Australian credit and debit card brands in its stable, along with more than 100 loyalty cards. Internationally the platform has more than 870 bank partnerships.

Will Apple Pay Win The Contactless Payment Wars?

New research suggests that Apple will dominate the OEM-Pay market over the next 4 years, leading Samsung, Google, and Others.

Data from fintech analysts, Juniper Research, estimates that the number of OEM-Pay contactless users, including Apple Pay, Samsung Pay, and Android Pay, will exceed 100 million for the first time during H1-2017, before surpassing 150 million by the end of this year.

According to the new research – Contactless Payments: NFC Handsets, Wearables & Payment Cards 2017-2021 – the combined market share of Apple, Samsung, and Google (via Android Pay), increased from 20% in 2015 to 41% in 2016, as a proportion of total mobile contactless payment users. Juniper forecasts that this will rise to 56% by 2021, as the trio’s combined user base exceeds 500 million.

 

Apple Pay & the US Wallet Opportunity

The research found that Apple Pay, and the alternative wallets that have followed in its wake, are set to establish themselves as the primary contactless mechanisms of choice in the US. However, the challenge facing Apple and its rivals is to ensure that the infrastructure is in place for consumers to make in-store payments.

“We believe that as contactless usage gains traction and consumers/merchants recognise the speed and convenience it offers, then, as in European markets, there will be a further and significant increase in availability at the point-of-sale”, added research author Nitin Bhas. Indeed, according to Apple, the proportion of US retailers supporting Apple Pay rose from 4% in 2014 to 35% in late 2016.

HCE Adoption to Rise 5-Fold Over the Next 4 Years

The research found that 2015/16 were watershed years for HCE (Host Card Emulation) in terms of commercial service rollouts. Juniper estimates that at least 194 banks had introduced such services by the end of 2016. Juniper expect PayPal, already near ubiquitous in the online space, to rapidly deploy a portfolio of contactless payment and loyalty solutions that will allow it to compete effectively for market share.

Westpac Now Offers Samsung Pay

From Gizmodo.

In the eternal war between Apple Pay, Android Pay and Samsung Pay, the world’s largest smartphone maker just scored another — minor — victory. Millions of customers from Australia’s second largest bank can now use Samsung’s phones and smartwatches instead of their credit and debit cards to pay at almost any NFC payment terminal around the country.

Although for the average user there’s not a great deal of difference, Samsung Pay is technically superior to Apple Pay or Android Pay in that — because it only works on a certain number of Samsung phones and Samsung’s Gear S2 and Gear S3 smartwatches — it can also emulate the MST magnetic strip on physical cards, which can be useful for payment terminals that don’t have NFC support already.

It’s also a convenient time for Samsung to switch on its newest feature — a NFC provisioning feature, which lets customers add cards into Samsung Pay by tapping them on the back of the phone, rather than taking a photo of the card itself with the phone or by — ugh — entering details manually.

Samsung already has Citibank’s Mastercard and Visa credit card holders on board, as well as American Express, so Westpac’s various debit and credit cards will massively bolster the roster of Samsung Pay payment methods available. Westpac customers will be able to add their cards to Samsung Pay from 8AM on Tuesday morning.

Westpac says:

You’re even more unstoppable with Westpac when you tap and pay using your Samsung Galaxy S7, S7 Edge, S6, S6 Edge, S6 Edge+, S5, S5 Mini, S4, Note 5, Note 4 Edge, Note 4, Note 3 or Alpha.

To start paying for everyday purchases with your smartphone, simply download the Westpac Mobile Banking app and choose which Westpac eligible credit and debit cards you’d like to use for mobile payments.

Apple Pay may have won the battle but it may not win the war

From The Conversation.

The Australian Competition and Consumer Commission’s (ACCC) decision to deny some of Australia’s major banks the ability to collectively bargain with Apple and boycott Apple Pay, might have opened a whole new door for digital wallets in Australia.

The banks wanted to bargain with Apple for access to the Near-Field Communication controller in iPhones, enabling them to offer their own integrated digital wallets to iPhone customers. This would have been in competition with Apple’s digital wallet, but without using Apple Pay.

A digital wallet is essentially an app on a mobile phone that can provide some of the same functions as a physical purse or wallet. This includes making payments in-store and storing information such as loyalty program points.

In the example of Apple Pay, it used a digital wallet to allow customers to use their phones like “tap-and-go” bank cards. Mobile payments can also be made via wearable devices, such as the Apple Watch and various fitness devices.

Part of the ACCC’s rationale in deciding on the banks/Apple case was that, “digital wallets and mobile payments are in their infancy and subject to rapid change”. So the ACCC is uncertain as to how competition will develop in this space.

The Australian market for digital wallets

Recent research from the Reserve Bank of Australia (RBA) confirmed the use of mobile payments accounted for only around 1% of the number of point-of-sale transactions over the week of the survey, which was conducted in November 2016. By contrast, the same research revealed that the share of the number of payments made using credit and debit cards had increased to 52%, driven by the use of these payments cards for lower value transactions.

This has been facilitated by the rapid adoption of contactless payments by both consumers and merchants and according to the RBA’s research, in 2016 around one-third of all point-of-sale transactions were conducted using contactless cards.

According to the Australian Payments Clearing Association by 2016, 77% of Australians owned a smartphone and yet mobile payments at the point-of-sale remain relatively rare.

The very success of contactless payment cards in Australia means that consumers do not see what extra advantage there is in mobile payments. Tap-and-go is increasingly available for even relatively low value transactions at the point-of-sale. Financial institutions have been speedy to issue such cards to their customers and this is matched by merchant’s adoption of the terminals to facilitate these payments.

For mobile payments to become significantly more attractive than contactless card payments, it would require the wallets to have additional functionality to appeal to consumers. Examples of this include: the ability to use mobile payment devices on mass transit journeys, to hold loyalty program points, to verify identity and enabling person-to-person transactions.

This breakthrough in functionality for digital wallets could come from another direction, other than the current mobile payments options of Apple Pay, Android Pay and Samsung Pay. Indeed, China provides an alternative example of how digital wallets can be developed, that will in retrospect make the ACCC’s decision on Apple Pay, rather passe.

Tap-and-go payments are popular in Australia so digital wallets will have to offer more than contactless payments. David Crosling

Digital wallet companies expanding from China

According to Chinese government statistics, about 750 million Chinese had moved online by 2016, with 95% of them accessing the internet via their smartphones. China’s digital payments market was by then nearly 50 times greater than that in the United States.

This is partly explained by the lack of other viable alternatives in China for non-cash payments. Credit card penetration is low compared to other developed markets, debit cards are not contactless and hence require authentication at the point-of-sale.

China appears to have jumped directly from cash to mobile payments and hence missed the step into payment cards, particularly credit cards, to which the Chinese consumers appear to have a cultural aversion.

The use of digital wallets in China is being driven by the success of the so-called financial technology firms in China, particularly Alibaba and Tencent. These companies have a vast and protected domestic market at their disposal and an almost complete absence of data regulations.

These companies have been able to move on from offering just instant messaging platforms, to being payment providers via Alipay and WeChatPay, respectively. These apps on a smartphone allows consumers to scan a QR code from a merchants point-of-sale terminal or smartphone, to complete a transaction.

Person-to-person transfers can also be done through these apps. Chinese company Tencent’s WeChat was originally a social media platform, but it has now expanded to include payments services, music streaming, taxi booking, photo sharing and a news service, to name only a few functions.

Its over 800 million worldwide active users now have fewer and fewer reasons to leave its integrated full platform of services. WeChatPay is also increasingly accepted by bricks and mortar merchants in China.

And now WeChat is planning to expand its services into the UK and Europe and is also looking to enter markets in the United States and Southeast Asia. Part of the company’s planned expansion is driven by the ever-increasing flow of Chinese overseas tourists.

This flow was 120 million in 2015 and forecast to be 220 million by 2025. Australia is already a popular destination for Chinese tourists, many of whom will be users of WeChatPay.

Who is to say that Facebook and/or Amazon will not follow Tencent’s path into digital wallets? While Apple Pay may have won the battle against some of Australia’s banks, it may lose the war against the providers of digital wallets, such as Tencent and Alibaba.

Author: Steve Worthington, Adjunct Professor, Swinburne University of Technology

ANZ Lifts Security on Mobile Devices with Voice Biometrics

ANZ today announced it will be the first Australian bank to introduce voice biometrics to improve security on mobile devices to allow higher value transactions.

From the middle of this year, customers transferring more than $1000 through ANZ’s mobile apps will be able to use their voice to automatically authorise high value payments. Previously customers needed to use internet banking or visit a branch to complete transactions more than $1000.

Managing Director Customer Experience and Digital Channels, Peter Dalton said: “One of the key challenges today for banking as the world becomes more digital is making it easier for customers to do what they want to do in a safe and secure way.

“Voice biometrics is the next step in making banking more convenient for our customers while also strengthening security.

“A person’s voice has five to ten times as many security points than other methods such as fingerprints so we know this will improve security and be welcomed by our customers. The technology is now so advanced that it can tell the difference between identical twins or even a voice recording.
“We also know that people are becoming more comfortable with using their voice to do basic commands on their devices, so we see this is a natural extension of current technology and we are expecting this to be a popular enhancement of our mobile apps,” Mr Dalton said.

ANZ has been working closely with world-leading voiceprint and biometrics company Nuance to bring this new technology to Australian customers. A pilot will begin with ANZ staff and select customers in May using the Grow by ANZ mobile app. The service will then be rolled out to ANZ goMoney and other digital services progressively.

ACCC denies authorisation for banks to collectively bargain with Apple and boycott Apple Pay

The Australian Competition and Consumer Commission has issued a determination denying authorisation to the Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank, and Bendigo and Adelaide Bank (the banks) to collectively bargain with Apple and collectively boycott Apple Pay.

“The ACCC is not satisfied, on balance, that the likely benefits from the proposed conduct outweigh the likely detriments. We are concerned that the proposed conduct is likely to reduce or distort competition in a number of markets,” ACCC Chairman Rod Sims said.

The banks sought authorisation to bargain with Apple for access to the Near-Field Communication (NFC) controller in iPhones, and reasonable access terms to the App Store. This access would enable the banks to offer their own integrated digital wallets to iPhone customers in competition with Apple’s digital wallet, without using Apple Pay.

“While the ACCC accepts that the opportunity for the banks to collectively negotiate and boycott would place them in a better bargaining position with Apple, the benefits would be outweighed by detriments,” Mr Sims said.

The banks argued that access to the NFC controller on iPhones would enable them to offer competing wallets on the iOS platform which would lead to the following public benefits:

  • increased competition and consumer choice in digital wallets and mobile payments in Australia
  • increased innovation and investment in digital wallets and other mobile applications using NFC technology
  • greater consumer confidence leading to increased adoption of mobile payment technology in Australia.

The ACCC accepted that Apple providing the banks access to the iPhone NFC controller is likely to lead to increased competition in mobile payment services and that this was a significant public benefit. However, the ACCC considered the likely distortions to and reductions in competition caused by the conduct would also be significant. Three likely detriments in particular stood out.

“First, Apple and Android compete for consumers providing distinct business models. If the Applicants are successful in obtaining NFC access, this would affect Apple’s current integrated hardware-software strategy for mobile payments and operating systems more generally, thereby impacting how Apple competes with Google,” Mr Sims said.

“Second, digital wallets and mobile payments are in their infancy and subject to rapid change. In Australia, consumers are used to making tap and go payments with payment cards, which provide a very quick and convenient way to pay. There is also a range of alternative devices being released that allow mobile payments; for example, using a smartwatch or fitness device. It is therefore uncertain how competition may develop.”

“Access to the NFC in iPhones for the banks could artificially direct the development of emerging markets to the use of the NFC controller in smartphones. This is likely to hamper the innovations that are currently occurring around different devices and technologies for mobile payments,” Mr Sims said.

The conduct is also likely to reduce the competitive tension between the banks in the supply of payment cards.

“Finally, Apple Wallet and other multi-issuer digital wallets could increase competition between the banks by making it easier for consumers to switch between card providers and limiting any ‘lock in’ effect bank digital wallets may cause,” Mr Sims said.

The ACCC consulted with consumers, financial institutions, retailers and technology companies in reaching its decision.

The Final Determination is available here: Bendigo and Adelaide Bank & Ors – Authorisation – A91546 & A91547

Background

A ‘digital wallet’ is an app on a mobile device that can provide a number of the same functions as a physical wallet, including the ability to make payments in-store and storing other information, such as loyalty or membership cards. A ‘mobile payment’ is a payment performed in-store using a digital wallet.

On 19 August 2016 the ACCC decided not to grant interim authorisation to the applicants.

On 29 November 2016, the ACCC published a draft determination proposing to deny authorisation.

Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit resulting from the conduct outweighs any public detriment.

Further information about the applications for authorisation is available on the ACCC Authorisations register: Bendigo and Adelaide Bank & Ors – Authorisation – A91546 & A91547