Coles Supermarkets today announced that they had finally completed the rollout of Contactless Payments across 750 Supermarkets adding another 14,000 terminals to the MasterCard PayPass network that now numbers over 100,000 terminals across Australia. They join 7-Eleven, McDonalds, Bunnings, Dymocks, Australia Post, IGA Supermarkets, Chemists and numerous other retailers gearing up with contactless (tap and go) capability that can shave over 25% of the time off the payment process. Cabcharge has also rolled out over 20,000 contactless terminals in taxis and recently hit the 2 Million contactless payment transaction mark.
7-Eleven, one of the early adopters noted that the payment process can be cut from 35 seconds for a mag stripe / pin entry to 4-6 seconds with contactless, a significant time saver. There have been some consumer security concerns raised (as no PIN is required), but as the transactions are limited to low value (currently under $35) and both Visa and MasterCard have clearly stated that card holders will not be responsible for fraudulent use of their cards – this should not be an issue in the longer run.
A recent Deloitte study stated that 80% of of the total Australian cash transactions are currently under $35 amounting to some $470 Million a day moving through the Australian economy – significant numbers and significant time savings if these switch to contactless.
Consumers will get to love the convenience and speed of payment afforded by contactless and as the number of contactless cards issued by banks increase, the usage and take up will be much wider reducing the use of cash significantly. Currently it is estimated that usage of contactless cards has risen from 7% of the total population last year to over 14% this year with card ownership up to 35%.
Having this extensive contacless infrastructure in place in place puts Australia in a great position with the release of the new iPhone 5 scheduled for late September that is almost certainly going to come out with a Near Field Communication (NFC) chip that will also be able to be used with contactless terminals for tap and go payment. Westpac has just started a pilot program for NFC equipped Android phones with the Google Wallet – which will allow customers to tap their phone instead of their card.