Australians will shortly be one step ahead on mobile payment technology with a new app from Commonwealth Bank.
The bank's Kaching app not only employs Near Field Technology (NFC) to allow users to wave an iPhone around to pay for their latte, it also lets users make payments to contacts in their address book and through Facebook.
Anyone can receive a payment. The receiver simply has to enter their BSB and Account number when prompted by a message sent from the app.
While the ability to make 'social payments' through BPay over Facebook and an address book will be free to Commonwealth Bank customers, the NFC capability will require some hardware.
Apple has declined to add NFC to its handsets so far, so Commonwealth plans to release a case for the iPhone 4 and iPhone 4s with MasterCard's PayPass technology built in, called iCarte. No word yet on how much this will cost.
It's just for iPhones at the moment and Android fans may question this decision. NFC technology is already supported by Google's Android operating system and Samsung Nexus S handsets are capable of making mobile payments. In the US, Citi Bank customers on the Sprint network can make mobile payments from their Nexus phone.
Commonwealth says iPhones account for 79% of all NetBank Mobile logins, which is why it was the logical place to start with Kaching.
An Android version is on the way, although Commonwealth hasn't confirmed whether it will use the existing chip or require a case.
It's a big step for mobile wallets and Commonwealth Bank claims Kaching's Facebook feature is not just an Australian first but a world first.
Worth changing banks for?
Commonwealth Bank suggests a few ways in which making quick, simple payments to friends who are already connected to through Facebook, email or phone number in your iPhone would be useful, such as splitting a dinner bill, buying concert tickets or chipping in for a present. This is a good technical solution to making payments directly to friends, family and even small businesses without asking for their bank details.
The app certainly does bring payments up to date with the way we live and work and is highly relevant. Combining 'social payments' with NFC is a nice gimmick and might help raise the popularity of this technology, which is currently restricted to PayPass users in Australia.
It's nice to see Australian banks becoming a little more competitive and innovative but the bottom line will always be security.
According to Commonwealth Bank, security is "always top priority". The app will password protected so that a lost or stolen phone will not enable access to a user’s personal banking details. It will also be restricted to one handset, and no personal banking information is stored on the phone.
If a payment is not received, the payer will be credited after 14 days.
While some may want to wait for biometric security features such as fingerprint identification as used in Japan, or even facial recognition which may be the next step from Google, these security features are reassuring.
There is no date on when the app will be released but expect a lot of interest when it arrives.