Contactless payments technology
Catching the new wave
As banks look to up their future services to consumers, some banks in Australia are piloting how they can deliver low value payments without cash – called micropayments or contactless payments in the business.
A recent Deloitte report on Contactless payments technology: catching the new wave – looks at the benefits of this card-based slice of the low value cash economy, with Visa’s payWave technology already successful in Malaysia, South Korea, Taiwan and the US.
According to RBA statistics, there are an estimated $470 million dollars in cash transactions under $35 moving through the Australian economy each day, or around $170 billion per year.
This low value cash economy is fertile ground for improvement as not many people realise that cash is in fact the most expensive payment instrument to operate.
With 80% of the total Australian cash transactions under $35, to convert even a proportion of these payments from cash to a card or mobile-phone technology would be a win:win for the parties involved. It would be convenient for consumers, time saving for merchants, and money-making for the banks and technology providers.
Currently able to operate 25% faster than contact transactions, such as EFTPOS and traditional credit cards, this contactless technology works well particularly when it comes to transport, parking and vending.
Public-transport cards have grown the uptake in Hong Kong, Singapore and Japan. And within the UK, Barclays and Transport for London has recently deployed a micropayments solution using the Oyster card – a stored-value application.
For example Octopus in Hong Kong has a card base of over 16 million, with close to 95% penetration of the 16-65 age group generating 3.8 billion transactions per annum. Octopus Cards Limited is now exporting their solution to other markets, including Dubai.
Contact Australian Deloitte partner Chris Wilson to learn more about the benefits and opportunities of this new wave technology for Australian consumers, merchants and banks.
Contactless payments technology: catching the new wave (PDF 412KB)
Deloitte UK research report
Media release: Technology to revolutionise low value transactions
Deloitte US Insights podcast: Branching out: how banking is changing with and without banks
Deloitte UK Thought leadership: Could mobile payment at the point of sale ever pay for itself?
Deloitte US Thought leadership: Is the retail payments industry headed for disruption?