NAB lets customers tap and pay on Android phones

The National Australia Bank has released a mobile payments service for Android smartphones, dubbed NAB Pay, in partnership with Visa.

NAB was absent from a list of five of Australia's biggest banks who signed up with Google's Android Pay payments service late last year. At the time it declined to comment on its plans.

Today the bank announced its own mobile payment service for Android phones, allowing customers with NFC-equipped Android phones and a NAB Visa debit card to tap and pay at merchants with contactless payment terminals.

Customers must also be users of NAB's mobile banking application.

Payments can be made directly from the Android device's home screen, inside apps and from NAB’s own app, by tapping the phone on the reader.

There is a $100 per transaction PIN-free limit, after which customers must enter their personal identification number to complete the payment.

Android devices that use near-field communications and run at least version 4.4 “Kitkat” of Google’s mobile operating system will work with NAB Pay, the bank said.

However, Sony’s Xperia Z1, Z2, Z3, Z4, Z5 and M4 are listed as not compatible with NAB Pay, along with Google's Nexus 6P.

The partnership with Visa means NAB is the first local bank to implement Visa's token service, which launched in September 2014. It replaces card account numbers with digital tokens, meaning an individual's account number is not shared with the merchant.

NAB joins its rivals Westpac and the Commonwealth Bank to offer customers a mobile payment service for certain Android smartphones. The ANZ Bank is expected to launch its own long-awaited offering early this year.

NAB Pay marks another blow to the success of Apple Pay in Australia.

Apple and American Express recently partnered to bring the mobile payments service to Australia, but the consumer giant is yet to get any other financial institutions to sign up.

Banks are resisting Apple's push to take 15c of the 83c banks receive for every $100 worth of transactions processed on Visa or MasterCard. 

Many of Australia's big banks have instead signed with Google's Android Pay, which is understood not to demand a cut of interchange fees.