Commonwealth Bank mobile payments release welcomed by industry, but consumers still wary

Near field communication payment technology has taken a big step forward thanks to the Commonwealth Bank’s announcement of a new iPhone app, but the majority of consumers may take the better part of a decade to start paying through mobiles, experts have tipped.

The comments come as discussion is continuing to grow over the introduction of mobile payments system, with more manufacturers including NFC and companies such as Google introducing methods for users to pay with their phones via contactless terminals.

Forrester Research analyst Steve Noble says the “tipping point” will come when NFC is more convenient to use than normal cash or cards.

“Having a major player in the Australian space like the Commonwealth Bank is a big step forward, and will help to universalise NFC. But other steps forward will be required,” he says.

Commonwealth unveiled its mobile app yesterday, called Kaching!, which allows users to make payments to their friends using just a mobile phone number, email and Facebook, while it also allows payments to retailers through MasterCard PayPass contactless technology.

The app is the first major piece of tech in Australia that uses NFC to make payments, and is a big step forward for the technology. But Noble points out that until NFC becomes more convenient than using traditional methods, it will remain a niche player.

“There will be other steps needed. For one thing, NFC is not in the majority of handsets, and we need these little things to add up before people use it in the same way they get the credit card out of a wallet.”

One of the bigger disadvantages of the Kaching! app, which is just available on the iPhone, is that Apple’s device doesn’t include NFC tech. Users will need a separate case to use the app, rather than having in-built technology.

Telsyte senior research manager Sam Yip says NFC really needs to come to the iPhone before the wider user base starts paying attention.

“This app is a big jump in consumer behaviour, and I think this is a long-term educational process.”

“This also seems to be a solution targeted at a particular demographic. I think the Commonwealth Bank really needs to portray itself to the wider customer base.”

There has been talk of Apple including NFC in its next iPhone, and rumours of a payments system, but nothing has been confirmed. As for now, Noble says small steps such as the release of the app will start taking place, and that eventually, mobile payments will take off – but right now, the consumer base might not be ready.

“We will definitely get there, absolutely. But it’s not going to be in the next year, not even in the next three or four years. I think you’ll find the late majority taking this up, certainly over the next decade.”