Technology to revolutionise low value transactions
The launch of Brisbane public transport’s ‘go card’ frequent user scheme across South East Queensland’s bus, rail and ferry services this week could herald the takeup of a revolutionary non-cash payment scheme in Australia, Deloitte partner and distribution channel expert Chris Wilson said.
“Going ticketless is the way contactless payments technology started in Hong Kong, the UK, Japan, Singapore and the US,” he said.
“For instance the Octopus stored value card has now more than 16 million users in Hong Kong, with close to 95% penetration of the 16-65 age group, generating 3.8 billion transactions per annum.”
“Brisbane’s 2811 journeys using ‘go cards’ has a way to go – but it is early days,” said Wilson. “It could be the start of something big for Australia,” he said referring to Deloitte’s latest report on micro contactless payments – Contactless Payments: Catching the new wave.
“Transport cards have been the vehicle that banks and card providers have successfully used to deliver low value payments without cash around the world. And Australian banks are already piloting alternatives to cash for transactions under $35.
“The low value cash economy is fertile ground for improvement’, Wilson said. “When you account for cash management and fraud costs, cash can be a very expensive payment instrument to operate!”
According to Deloitte research based on Reserve Bank of Australia statistics, there is an estimated $470 million dollars in cash transactions under $35 moving through the Australian economy each day - around $170 billion per year.
“With 80% of Australia’s total 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,” said Wilson.
“It would be convenient for consumers, time and cost saving for merchants, and create new revenue opportunities for the banks,” he said.
The Deloitte report Contactless Payments Technology: Catching the new wave, points out that contactless payments technology can operate 25% faster than contact transactions, such as EFTPOS and traditional credit cards.
“Partnering with transport, parking and vendor industries is working well across the world and public-transport cards in particular have grown the uptake of the technology in Hong Kong, Singapore and Japan,” Wilson said.
He pointed out that within the UK, Barclays and Transport for London had successfully deployed its micropayments solution using the Oyster card – a stored-value application – and that Visa’s payWave technology is also already successful in Malaysia, South Korea, Taiwan and the US.Click here to download the UK Deloitte research