mobile payments – APCA Blog

Are contactless bank cards the future of public transport ticketing?

Alice Markie — Tue, 31 May 2016 23:04:14 +0000

Sydney commuters could be replacing their Opal cards with bank cards – and even their mobile phones – as early as next year, if the trial goes well. This would put Sydney in-line with the likes of London where contactless…

Perspectives on the Australian Payments Plan

Alice Markie — Wed, 03 Feb 2016 01:26:11 +0000

Last month’s release of the Australian Payments Plan (APP) signals big changes for the Australian economy – but what does it actually mean? Watch: Mark Birrell, Chair of the Australian Payments Council, explains what the Australian Payments Plan is and…

Australia providing ideas to help bring digital payments to the poor

Brad Pragnell — Tue, 06 Oct 2015 23:23:01 +0000

Does Australia’s New Payments Platform hold some lessons for developing countries looking to design their own digital payments system? The Level One Project Guide, released earlier this year by the Bill and Melinda Gates Foundation, would suggest so.

The Bill and Melinda Gates Foundation is one of the world’s most influential NGOs. It supports numerous initiatives, primarily aimed at health and economic development in developing countries. An area of interest for the Foundation has been financial inclusion, with a particular focus on how new digital technologies, such as mobile phones, can be used to provide low cost and accessible payment services to the poor.

Apple Pay in Australia

Chris Hamilton — Mon, 10 Aug 2015 04:21:41 +0000

Here at APCA, one of our jobs is to ensure that the community is well informed about payments systems and their future evolution. We were therefore very interested in recent industry media commentary on the evolution of new payment technologies and, in particular, the progress of Apple Pay in Australia.

Australian payment institutions have been criticised by some in the local media for not getting together to make Apple Pay happen. I am not privy to any commercial discussions (of course), but that is a little surprising. There just might be legitimate pro-competitive reasons for that not happening – they are competitors and given Apple’s market weight, they will doubtless have a significant effect on competitive dynamics. This bears careful thought.

New research highlights an increasingly “banked” world

Brad Pragnell — Wed, 24 Jun 2015 05:55:02 +0000

Billions of people, primarily in developing countries, have historically had neither bank accounts nor access to electronic payments. When saving and making payments, they have had to rely on cash.

This is rapidly changing. According to the recently-released World Bank Global Findex, in 2014, 62 per cent of the adults worldwide had a formal account with a financial institution or mobile money service – a dramatic increase from 51 per cent in 2011.

This upswing in financial inclusion has been facilitated by a growing middle class in many developing countries and easily available technology, in particular the mobile phone. However this growth has taken a different path in different regions.

Why does it take up to a day to process my internet payment?

Chris Hamilton — Fri, 05 Jun 2015 02:21:31 +0000

The use of online banking websites and mobile banking apps has increased a lot in Australia. We have one of the fastest uptakes in the world of that sort of technology. One of the side effects of this is that people are now much more aware than they used to be of how quickly a payment they are expecting is going to hit their account. And that’s led to a lot of discussion and chatter about how quickly payments take place.

The times they are a ’changin’…

Chris Hamilton — Fri, 27 Mar 2015 03:49:32 +0000

We seem to be getting a lot of media queries at the moment about electronic payments, how they work, and how quickly they happen. Maybe this is a consequence of the increasing use of mobile banking – people can see things happening on their accounts wherever and whenever. This means that the mechanics of payments are more “in your face”.

In line with changing customer expectations, payments processing is speeding up, but doing this in a reliable and secure way itself takes time, given the size and importance of the system. Australia’s “direct entry” electronic payments system handles around 8 million payments a day, between about 35 payments organisations (banks and others). There are around 300,000 registered users – these are businesses that routinely use the system – and millions of account-holders. The system is the backbone of Australian business, supporting every kind of payment from big outlays, like commercial rents, through salary and wages (these days, nearly all of us get paid by direct entry) down to the little payments we make to each other on internet and mobile banking.

Tough medicine for the UK payments system – but how sick is the patient?

Brad Pragnell — Tue, 18 Nov 2014 03:47:45 +0000

On 13 November 2014, the UK Payments System Regulator (PSR) released “A new regulatory framework for payment systems in the UK”. This document outlines, and seeks feedback on, the PSR’s thinking on its regulatory approach in the lead-up to becoming operational in April 2015.

The PSR is a new economic regulator that sits within the Financial Conduct Authority and has broad powers to designate payment systems and impose standards. While on paper, the PSR’s powers are not too dissimilar to those of Australia’s own Payments System Board, at first glance, the 13 November consultation paper suggests a much more invasive, and it could be argued ill-conceived, regulatory stance.

The prospects for mobile contactless payments in Australia

Brad Pragnell — Wed, 16 Apr 2014 04:49:31 +0000

Many Australians believe their smartphone might one day replace their contactless cards. Research by Lonergan Research, on behalf of CBA, found that 73% of Australians believed their smartphone would replace their wallet by 2021. Australian financial institutions have, to date, met the demand for mobile payments through the use of NFC-enabled stickers and cases. The February 2014 announcement by VISA and MasterCard on “host card emulation”, where the secure element for a contactless payment can live in the cloud rather than in the phone, has reignited global interest in use of mobiles at point-of-sale, with a local trial being announced in Australia in March 2014. With consumer sentiment and facilitating technology shifting in its favour, what are the prospects for wide-scale embrace of mobile contactless payments in Australia?

Australia, South Africa and mobile payments

Chris Hamilton — Tue, 15 Oct 2013 04:02:04 +0000

When it comes to consumer payments, the future is obviously mobile. But the "how" of mobile payments turns out to be rather complicated.

I recently had the opportunity to participate in the Annual Conference of the Payments Association of South Africa. Systemic comparison is one key benefit of such an experience. Here we have two resource-driven economies of roughly similar size, similarly large physical distances but markedly different population demographics. The retail payments systems are diverging, rather than converging. This highlights the obvious point that payment systems are shaped by people's habits, not by economics.

Consider, for example, some simple comparisons between bank account ownership and mobile phone ownership. According to the World Bank, Australia is one of the most heavily banked populations on earth, with a 99% banking rate in 2012 - that is, 99 out of 100 Australians over the age of 15 had a bank account in 2012. South Africa, by contrast, has a 54% banking rate, and therefore a large community that is still cash-based. Now let's look at mobile phones: the "phoned" rate in Australia is a healthy 106%; in South Africa, 135%. Yes, every person in South Africa has a mobile phone subscription, and every third person has two. If you suspect the interaction of these two comparison pairs leads to different payment evolutions, you would be right.