Westpac joins the race to phone-based payments

Westpac has joined the race to be the first Australian bank to offer its customers wave-and-go payments via their smartphones, without requiring a sticker or a fancy case.

Commonwealth Bank announced its intention to launch similar technology in October, but is yet to provide an indicative timeline for when it would become available to shoppers.

Westpac customers using a Samsung Galaxy S or a Galaxy Note 3 would be able to use their devices to pay in stores by passing them over Visa payWave terminals from “early 2014”, the bank said today.

The new Android-based devices combine a 'secure element' - (a partitioned area of memory, usually in an extra smart card chip, SIM or SD card)  in addition to embedded near field communications (NFC).

Westpac now feels the devices are secure enough to begin allowing its customers to pay for goods and services in stores with their phones, the bank’s chief product officer David Lindberg told iTnews.

Initially, NFC phone payments will be resticted to users of these specific Samsung models.

Lindberg said he hoped that within 6-12 months a new security protocol officially certified by  the Europay, MasterCard and Visa alliance (EMV) will allow all near field communications (NFC) enabled Android devices to join the party.

Apple (iOS) users that bank with Westpac won’t be able to use payWave with their phone until Apple begins manufacturing devices with the same NFC features.

Further, Westpac confirmed it will not follow CommBank and attempt to bridge the NFC divide with a ‘pay tag’ sticker that can be adhered to the back of any type of phone to deliver the same wave-and-go capability.

“We did trial stickers and we were very hopeful that it would work, but the customer experience with the sticker was just not up to our brand standards.

“First of all, our customers did not think the technology was forward looking, and the failure rate was higher than we had hoped. Also the operational complexity added by applying a sticker and keeping it on the phone was high,” he explained.

The timing of Samsung’s upgrade has been near perfect for Westpac, which is also due to launch its updated mobile banking platform early in the New Year. The public release will be the precursor to the contactless payment roll-out.

“We invested an awful lot of money into a new mobile banking platform, but when we started we didn’t realise that it would enable this.

“While the integrated secure element on the phone has provided us with the opportunity to offer this service, it has been the new mobile banking platform that has really built the bridge between the phone technology and our own systems,” he said.