The Commonwealth Bank of Australia has attracted some 200 developers to its new point-of-sale (POS) payments platform, Pi, after the platform’s launch last week.
Two years in development, Pi is built on Google’s open-source Android operating system with a core that has been hardened by the bank’s developers to ensure transactional security.
Applications are the heart and soul of Pi, which can be customised extensively to put loyalty, retail, discount and other applications at customers' fingertips during a sale.
Initially, Pi will ship within CommBank’s iPhone cradle and payments system ‘Leo’, for which applications will be restricted to those written by the bank’s developers.
But the proverbial sky will be the limit for third-party application developers when the bank ships its custom, touch-based Android tablet named ‘Albert’ next year.
According to CommBank’s executive general manager of corporate banking solutions, Kelly Bayer Rosmarin, the bank had expected to attract “a few dozen” third-party developers at the outset.
“We thought we would work closely with three to five app developers we already knew in this space, and that we would have a few dozen,” she said.
“But we’ve had more than we anticipated. We’ve done it on a standards-based platform that is easy to build on, and it’s good if there are different ways to bring the brand to life.”
Cost and competition
CommBank has yet to disclose its pricing structure for Pi, with Rosmarin saying only that merchants would “find it attractive”.
“We're the largest acquirer in Australia, and we understand how customers want and need to pay for these,” she said.
But lack of clarity around pricing isn't sitting well with Eftpos Australia, the market's dominant payments processor, which claims an installed base of more than 734,000 merchants and handles the majority of debit-card transactions in the country.
Eftpos managing director Bruce Mansfield lauded Pi as “a very exciting development that really changes that interaction between customer and merchant, making it much more inclusive in relation to how they shop and engage the payment transaction”.
“Over the next months and years you'll see a refreshing of the existing POS network in this country,” he said.
But Mansfield also expressed concern that the CommBank's eventual Pi pricing model – and its support for contactless payments through ‘digital wallets’ like those available on Android and set to ship with Apple’s upcoming iOS 6 – could help the bank tighten its grip on the merchant market.
“Technology does give you the capability to lock out your competitors, so it's important that we have an efficient and open payments system,” he explained.
“Contactless will offer challenges and opportunities, but it also has to offer choice as well; that's a very important theme and we need to deliver as an industry.”
That sort of choice, and the inevitable competition from other banks, should keep transactional prices from changing and Albert-like terminals at quite reasonable prices, according to John Tait, general manager of sales and marketing with Ingenico, which manufactured the Leo case.
“What you’ll see will be complementary [applications] rather than competing,” Tait said. “After ten years of focusing on compliance in the industry, all of a sudden we’ve got innovation – and that’s great for consumers, and merchants, and the industry.”
Read on to page two for how Pi might affect CommBank's web 2.0 competitors.
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