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
"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.
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.