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CommBank installs contactless payments too

By Suzanne Tindal, ZDNet.com.au on October 15th, 2009

Commonwealth Bank of Australia has followed National Australia Bank (NAB) in rolling out contactless payment terminals to select locations.

Contactless card and reader
(Credit: Commonwealth Bank)

From this month, MasterCard PayPass and Visa payWave cardholders spending less than $100 won't have to swipe their debit or credit cards at contactless terminals located in selected IGA and Red Rooster stores to pay. Instead they will be able to tap their cards on the reader without having to enter a pin or provide a signature. Etihad Stadium in Melbourne is also involved.

Currently around 200 terminals are in operation. Commonwealth Bank said it wanted to ramp up the number of contactless terminals in the market, planning to have more than 2000 by the end of the year. Tens of thousands could be rolled out in the next 12 months, the bank said. It currently has 160,000 standard terminals in total.

The contactless terminals reduce queuing times, allow merchants to have less cash on hand and attract customers who would have bought a product if they'd had the cash on hand, but didn't want to go through the longer steps for a card payment, according to the bank.

"For high volume retail environments, such as coffee shops, grocery stores and newsagents, where transaction values are low and speed of service is essential, the contactless solution is ideal for merchants. The entire process takes just a few seconds, so it is actually faster than cash," Commonwealth Bank business products and development general manager Kelly Bayer Rosmarin said in a statement.

Some people, however, have been concerned about the security of the system. The bank attempted to reassure such doubters by saying that contactless payment was just as secure as paying with a card protected by PIN or signature. Markets that have introduced it have not seen a significant rise in fraud, Commonwealth Bank general manger merchant solutions Dominic White said. "The activity is not to take this and buy a few burgers — fraudulent activity will be to use it to buy something larger," he said. For larger purchases, the cards operate with PIN and signature.

NAB announced its contactless payment terminal roll-out last month. It plans to have 2500 readers out to Melbourne merchants by Christmas this year.

Despite NAB beating Commonwealth Bank on the roll-out announcement, CommBank said it was the first to fully roll-out contactless credit and debit cards: the bank currently has three million MasterCard PayPass cards issued. It hasn't rolled out contactless payment cards to its Visa customers and at this point there are no plans to do so, according to White.

NAB on the other hand is more closely aligned to Visa as only the Visa payWave cardholders can spend up to $100 using the bank's contactless terminals. Meanwhile, MasterCard PayPass can only spend up to $35. White said that Commonwealth Bank terminals will treat both card types equally.

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