ANZ trials NFC payments, eyes biometrics

ANZ has initiated its NFC contactless payment trial and is keen to enable biometrics for banking. The bank launched its AU$1.5 billion Banking on Australia initiative today, which saw it rollout a number of technology offerings for customers.

One of the initiatives is a mobile wallet trial involving 25 staff testing NFC payments using Samsung Galaxy S3 handsets. Optus was the telco partner for the trial, and ANZ is using Giesecke & Devrient as its trusted security manager to manage the relationship between the telco and the bank. The secure element used was embedded in the SIM card. Transactions were limited to values of up to AU$100.

Another way to deliver the secure element for NFC onto smartphones is by doing so through microSD cards, which would bypass the need to deal with telcos all together, but ANZ Bank head of payments John Collins said ANZ favours the SIM method, because it's becoming the preferred choice worldwide.

"The long-run solution needs to be telco agnostic," he said. But that leaves ANZ at the mercy of telcos, since enabling NFC wallets would hinge on them agreeing to allow for it.

"There needs to be a coming together of telcos to get to the utopia of telco agnostic [NFC payments]," Collins said. "To begin with, until there's an industry alliance around telcos, like in Europe, we will have to have individual discussions, initially, with all the telcos."

While ANZ's NFC trial is similar to Westpac's trial announced in August, ANZ's trial base is comparatively small. Westpac is testing with 100 real customers, whereas ANZ is only testing with 25 staff members, one of which is ANZ CEO Philip Chronican.

"We have to start small, and work our way through it," Chronican said. "We're starting with 25, and will rapidly expand that out as we go."

ANZ hopes to trial the NFC wallet with real customers in 2013 and plans to launch the capability by the middle of next year.

Biometrics for banking

In a recent survey commissioned by ANZ, 79 percent of Australians said that they were comfortable with fingerprint technology replacing banking PIN. One third of respondents also said that they prefer to live in a cashless world.

ANZ is keen to make biometics for banking a reality, though it has yet to make any decisions on which form of biometrics it wants to move forward with to eventually replace customer PIN numbers for payment identification.

The bank has been watching the biometrics space carefully and noted there has been some work done on voice biometics, as well as fingerprinting and facial recognition.

"We want to see what our customers' response to which form of biometrics they are most comfortable with," Chronican said. "We do think biometrics will be very important going forward, and it will be probably two to three years before we get commercialisation of biometrics in banking."

"But, obviously, it does overcome the issues we have around security at the moment ,where PINs and codes are so easy to replicate."

The bank will also have to consider how to safely store the customer biometrics data it obtains, to ensure that they do not get into the wrong hands.

"Security around biometrics data is a whole different ball game," Chronican said. "That's why we want to get comfortable with how we manage it and the willingness of customers to engage [us through biometrics]."