A contactless iPhone payment system, developed to serve as a stopgap given Apple's reported boycott of existing Near Field Communications (NFC), is being trialled by Visa and Australia and New Zealand (ANZ) Banking Group.
The technology, now undergoing a four-week internal trial by 50 employees of the companies in Sydney and Melbourne, allows Apple iPhones and Google Android devices to be used like the payWave contactless cards, which transact payments under $100 without a PIN or signature. It has been designed with an NFC chip built into a phone cover, allowing contactless payments to work on devices that lack NFC capability.
Shaky standards for NFC technology have polarised some phone manufacturers, delaying adoption. Apple has reportedly ditched NFC for its upcoming iPhone device.
To do payments under the ANZ and Visa trial, users need to put a cover, developed by DeviceFidelity, on their phone, then start and enable an application and hold the device within 4 centimetres of a contactless terminal. There are 20,000 contactless payment terminals around Australia.
Visa Australia and New Zealand director innovation Ben Pfisterer would not say when the system will be available for customers, but hinted that it would be shortly after the four-week trial is completed.
He said the case with its chip will allow banks to develop applications for smartphone contactless payments earlier than if they had to wait for tardy manufacturers to build NFC technology.
"Every manufacturer apart from Apple has said they will build NFC … [so] applications can be built around NFC," Pfisterer said.
Pfisterer said a lost phone with the NFC cover system does not present a greater security risk than a lost payWave credit card does. In fact, he said it improves it.
"There is a lock on phones, and you can't lock a credit card," Pfisterer said. Visa will also launch a mobile version of its Verified by Visa authentication system with the NFC system, meaning users can make use of a suite of transaction verification options.
"Another key thing is that we are so obsessed with phones — it takes 20 minutes to discover and report a lost phone, and 24 hours to discover a lost wallet."
Visa said a trial a couple of years ago with the National Australia Bank and Telstra had also integrated the technology into a phone, but was not commercialised due to consumer appetite.