Tap and pay raises security anxieties

Fran Foo
December 13, 2013
The Australian

MILLIONS of shoppers could soon be “tapping and paying” for groceries and other services with their smartphones. Yet while it is convenient, security fears could stymie the uptake.

The Commonwealth Bank swooped in to launch the first tap and go functionality for smartphones, a day after rival Westpac unveiled its own offering, due out early next year.

CBA, working with MasterCard, said customers would immediately be able to buy products and services by tapping their Google Android phones at the checkout.

Westpac, in tandem with Visa, yesterday said it would launch the same capability within weeks.

The maximum amount for tap and pay is $100 and transactions exceeding that limit would require a PIN. Consumers can already tap their physical cards against a contactless terminal and make purchases.
Customers for both banks will have to first store their debit or credit card details in their respective bank’s mobile banking app. The Westpac solution works for both Visa and MasterCard customers, but CBA supports only the latter.

CBA’s offering will work on the Samsung S4 without any add-ons and across all Android smartphones, which will require a $2.99 smart-tag sticker. Apple handsets will be supported next month, also via a sticker.

Only Westpac customers with either an Android-based Samsung Galaxy S4 or Note 3 can use its service.

While the banks stand by the security of their new payment platform, analyst with research firm Telsyte, Foad Fadaghi, has his reservations.

According to Telsyte’s digital consumer study of more than 1000 people, about 20 per cent of respondents said they were comfortable using their smartphone to pay for goods and services by waving it against a device attached to a cash register.

Thirty per cent of respondents said their smartphone was not physically secure and they were worried that someone else could use it to pay for goods, Mr Fadaghi said.

CBA executive general manager for cards, payments, analytics and retail strategy, Angus Sullivan, said customers needed only to have their smartphone screen illuminated to pay for goods. “There are different security settings customers can choose. It can work only once they’ve put in a PIN or anytime a phone is activated.”