Coles launches a mobile wallet

Coles has opened its Mobile Wallet to the public, enabling customers of its credit cards to make contactless payments at the cashier using their mobile phone.

The service uses a combination of a Pay Tag attached to the back of a smartphone, an iOS or Android app, Mastercard PayPass terminals and a Coles Financial Services credit card account.

The combination of technologies has been trialed by 5000 Coles customers on two occasions. The retailer today said that 77 percent of customers preferred the use of Pay Tags, a sticker adhered to the back of the smartphone, to pulling out a plastic credit card from their wallet.

Retailers and credit card companies are using external sticker-based solutions to wrestle control of mobile phone payments from mobile iOS vendors. Apple has not as yet enabled NFC (near field communications) technology in its smartphones, but is rumoured to be doing so in the next release of its mobile operating system.

The Coles Pay Tag is compatible with MasterCard PayPass terminals, which MasterCard claims to be available in 320,000 retail stores nationally. It also features a FlyBuys barcode so Coles cashiers can swipe it to add loyalty points to a purchase.

Android users are asked to turn off Near Field Communications (NFC) so the technology doesn’t interfere with the signal from the Pay Tag stickers. For purchases over $100, Mobile Wallet customers must continue to enter a PIN.

Both the Coles Mobile Wallet Android app and iOS app are available to Coles MasterCard credit card customers from the iOS and Google Play stores as of late yesterday. The app combines a transactional credit card account with Coles’ FlyBuys loyalty program.

Customers can use the app to register for their ‘Mobile Wallet’ account and request a Pay Tag sticker be sent in the post, which takes up to ten days. Once the Pay Tag is received, users must call Coles Financial Services to activate it. Customers can only register for one Pay Tag per Coles credit card account, which is swapped out every four years.

The Coles Pay Tag can be turned on and off using the app. From a security perspective, it is covered by the same anti-fraud mechanisms as a Coles MasterCard credit card, with an in-built chip “providing protection against personal details being copied,” according to a Coles statement.

Coles Financial Services is a division of the retailer backed by GE Capital.