In 2007, the National Australia Bank (NAB) teamed up with Telstra and Visa to offer 250 users the chance to test out one of the first near-field communication (NFC) payment trials in Australia. At the time, the bank said it could be ready for mass market deployment within a few years. Four years later and the bank seems no closer to commercialising the product. What happened?
Speaking at the Informa Digital Money summit today in Sydney, key executives from NAB and Telstra spoke on the product's development process, saying that it was a hard slog even getting it off the ground.
Rocky Scopelliti, national general manager of Financial Services, Industry Development with Telstra Enterprise & Government, said that when the telco first signed up for the project, it had no idea what it was getting into.
"I had three meetings with NAB and we agreed we were going to do this. To get executive agreement was three one-hour meetings. At the time, we weren't really sure what we were signing up for, but that's what innovation is essentially about. It's a discovery process," Scopelliti admitted. The Telstra executive added that once the NFC pilot program had been agreed to on both sides, they worked on building a system that would be as close to the finished product as possible.
"It probably took about eight to 12 months to get the pilot going because there's a lot of operational work in everyone's systems. The reason why it was complex was because we intentionally decided to emulate what a real experience would be from start to finish, from provisioning the customer, all the way through. This was as much about a technical trial as it was a customer experience trial," he said.
Roger Seow, senior manager of Channel Development and Direct Banking for the National Australia Bank, said that once the trial was wound up, over 90 per cent of users said they would use the product if it was available, while over 70 per cent said they preferred it to using cash. Seow said it was "music to his ears". However, somewhere amid the review process, NAB decided to steer away from the project in favour of a push towards a mobile banking app.
Seow said that a number of problems prevented the NFC product from ever making it to market.
"We had the learnings, we did all our post-implementation reviews, but we didn't go full swing because it didn't stack up, there were a number of limitations. Among them was a lack of handsets, the customer experience wasn't quite there yet, standards were still evolving and moving rapidly; it just wasn't there," he told conference attendees dejectedly.
Technical conversations at a branch level were also a concern for Seow when it came to the design of the microSD-powered NFC case.
"My personal view is that it's relatively easy to put the card onto the phone. It's probably also not so difficult to add services to the phone. The hard part is the last point: how do you service the customer? The last thing I want [is] anyone walking into our branches to say 'where do I stick the case?'.
"I want to have a quality conversation about their financial position, I don't want to have a conversation where they take up my branch manager's time and say 'you gave me an SD card that's two gig[abytes] but I have eight gig[abytes] of photos, how do I move them around?'. Wrong conversation in my stores, I don't want it," Seow said.
Despite all of these concerns, Seow said that times are changing, while hinting that NAB is working on another NFC product for the future.
"One of the challenges for any organisation to be innovative is lining up the internal drivers. We're working through that and I think there are many factors here. The business case has to stack up, the stars have to be aligned and I think they are being aligned because the number of handsets and technologies coming [out], so integration's a lot easier. We've still got a long way to go for it to come together. There's a greater spirit of partnering that we're hearing. We don't have all the answers, but we want to say 'come and help us build this future together'."
As to when it will be released, however, Seow said we have to wait and see.
"If you were a NAB employee, I could tell you," Seow added.