Australia and New Zealand Banking Group and partner Visa have unveiled a four week internal trial of mobile phones used as substitutes for credit cards.

The financial institutions are running a trial extended to 50 people across their offices in Sydney and Melbourne, to test the potential use of mobile phones in minor transactions. To conduct the experiment, they rely on an Apple iPhone case in which a built-in memory card acts as a credit card. Following the principle of contactless credit cards, when waved in front of a contactless cards reader the built-in chip will authorise payment up to $100 without the requirement of either a signature or a PIN code.

ANZ’s head of product management (consumer cards & unsecured lending) Sam Qubrosi said ANZ was proud to be experimenting with new ways of processing payments. “This is all about making banking simpler and more practical for our customers,” he said. “Mobile contactless payment is the next step in this evolution and we’re excited to be breaking new ground with this trial.”

The technology was developed by San Francisco-based company, DeviceFidelity, which partnered with VISA to develop its payWave application already in use for credit cards. For the mobile application, a microSD card combines with protective iPhone case, hosting payWave.

Through the partnership with ANZ, the microSD card can now host a prepaid ANZ account that can be topped up over the Internet. Visa Australia country manager Vipin Kalra said the trial would change the way payments are processed in Australia. “There’s no doubt that mobile Visa payWave will be the way of the future and I’m sure that the participants will find mobile payments to be a convenient and easy replacement for cash, ideal for fast, simple transactions,” he said.

He added mobile phones offered endless opportunities to develop new technologies and therefore new services. “… You could manage your account, detect fraud and receive real-time offers
from merchants,” he said. “Your mobile could become the new virtual wallet – it’s in the future but that’s definitely where we’re headed.”

The experimental technology may encounter skepticism and security concerns – as happened with the launch of contactless credit cards. However, ANZ and Visa said all payWave transactions, thus including mobile phone transactions – were backed by Visa’s Zero Liability protection and ANZ’s Fraud Money Back Guarantee.

This means customers won’t be liable for unauthorised payments when “promptly” reported to their bank or card issuer – further details on the policy are available on the pages of Visa’s website. Furthermore, customers have the option to receive a receipt anytime they conduct a transaction and the payment application can be deactivated quickly should the phone be lost or stolen.

Currently involving 50 employees from both Visa and ANZ, the trial will last four weeks. The technology is compatible with already-existing contact-less readers available at more than 20,000 retail outlets across the country; these include fast food restaurants, electronic stores, book shops, sporting stadiums, clothing stores and vending machines.

Image credit: Belinda Lester, Creative Commons

Related posts:

1. Coles rolls out contactless payments
2. Visa, the iPhone & NFC: The Australian state of play
3. Contactless payment hits Woolworths
4. ‘Kaching’: New CBA mobile, social, NFC payments app
5. PayPal chief hits Australia, wants POS payments

Tweet

1. John Candido
   Posted 16/03/2011 at 9:48 am | Permalink | Reply

   This is a really fantastic idea. I want to buy an iphone 5 whenever it comes out in future. My only query is when will the ANZ bank release the visa PayWave function on all of their credit cards? I have a Frequent Flyer Visa card from the ANZ, and I am really getting quite frustrated as to when I will be able to make contactless transactions at the MCC as well as anywhere else. The AFL season is nearly upon us and I am really hoping I will have Visa PayWave before it starts.

   • Michael Wyres
     Posted 16/03/2011 at 12:30 pm | Permalink | Reply

     Lateral thinking – tell them your card doesn’t work anymore, and you need a reprint.

     • John Candido
       Posted 16/03/2011 at 1:44 pm | Permalink | Reply

       HI Michael, If only it were that simple. I rang the ANZ three months ago and asked them when will they be releasing Visa PayWave cards for those with Frequent Flyer reward cards. The representative told me that he could re-issue my card and I would then have access to contactless transactions. Great, I thought! When I got my card, it was an exact copy of my previous card, so I never got one. I rang the ANZ to explain what had happened. This representative apologised and told me that Frequent Flyer and the ANZ were negotiating a new agreement between them that took contactless transactions into account. Will the ANZ and Frequent Flyer move these negotiations along as quickly as they can, because I am sick of waiting any longer. The few cards that do have the PayWave feature with the ANZ are no doubt part of a public feedback trial. Please, I am begging you, change all of your credit and debit cards to Visa’s PayWave and Mastercard’s PayPass.

2. Michael Wyres
   Posted 16/03/2011 at 12:32 pm | Permalink | Reply

   So when your phone gets lost or stolen, you have to call your carrier AND your bank to get it cancelled?

   I can see the incidence of phone thefts going through the roof with this one – even if you choose not to have the feature activated, you become a greater target just because think you might have it activated.

   Clever, but lots of questions to be answered first.

   • Michael Wyres
     Posted 16/03/2011 at 12:33 pm | Permalink | Reply

     *just because THIEVES think you might