This is the first step towards a completely digital wallet in New Zealand, says Shane Howell, Westpac NZ chief product officer.
The Host Card Emulation (HCE) mobile payments is currently being trialled by around 40 bank staff and customers.
The system, which uses Carta Worldwide HCE technology, enables credit and debit card details to be securely stored in a remote and hosted ‘cloud’ environment, accessible from Android smartphones.
This places all relevant customer information in one place without the need to carry and use a physical credit or debit card.
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When you can leave your physical wallet at home, we know we have done our job.
Howell explains they took this route following the results of a survey among their customers that they want their digital wallet from their main financial institution. The system reduces dependence on mobile operators to deliver the payment.
“We have chosen to go this way as technology is developing so quickly and we can ensure flexibility by using HCE,” says Howell. “Working within an industry wide group such as the TSM (Trusted Services Manager) may not allow that flexibility.”
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With the local TSM or other solutions, the payment account details are provisioned into the SIM card or sitting on the handset. “That is a big difference.”
Dealing with disruption
Howell says banking is in a period of digital disruption and payments are a focus of innovation all over the world.
“Payments are something that customers do daily and developing ways to make things easier via digital and mobile channels is a focus for us.”
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After downloading a digital wallet app and registering their card details, customers will be able to use near field communication enabled Android handsets to make payments at any contactless terminal.
The cloud based solution is just as secure as the existing plastic card.
“We already use our smartphones to organise so many aspects of our lives, so using them to make payments is just a natural extension of this. This is the first of four key components we are looking to develop that will make up a digital wallet for Westpac customers.”
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He says the “next frontier” for the project is to incorporate transport cards for buses and trains, loyalty programs and potentially, identification cards such as drivers’ licenses or passports. Howell says the bank is already talking with industry groups to make this happen.
Howell, who is one of those participating in the trial, says after downloading the app, it takes around 30 to 60 seconds to make a purchase.
After downloading the digital wallet app and registering their card details, customers can make payments at any contactless terminal. Within 60 seconds, it is cancelled if the customer will not make any transaction.
Howell says banking is in a period of digital disruption and payments are a focus of innovation all over the world
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“Payments are something that customers do daily and developing ways to make things easier via digital and mobile channels is a focus for us.
“When you can leave your physical wallet at home, we know we have done our job," says Howell.
He says after six or 12 months, the bank will get feedback from customers on how they can take the “pain point” of the transaction. At the moment, the system requires a four-digit pin number, but fingerprint scan or other forms of biometric that will be available in smartphones may be used in the future.
‘Test and learn’ and calibrate to get the right customer experience is a key component of the deployment, he states.
According to Rui Mendes, CTO of Carta Worldwide, the cloud based solution “is just as secure as the existing plastic card”.
“With our advanced, layered security, each individual mobile transaction is protected. HCE enables mobile secure transactions that are compatible with existing contactless terminals," he states.
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