Yesterday, the Commonwealth Bank announced a new banking app that will allow customers to make NFC payments on Android and iOS devices. Supermarket chain Coles is also launching NFC payments, which will initially be limited to a 5000 customer trial. While this news is definitely cause for excitement, there's no denying that Australia is lagging behind most of the developed world when it comes to NFC payments — and a lot of the blame can be laid squarely on a certain phone company from Cupertino, California.
By the end of the year, Commonwealth Bank customers will be able to use their phones' internal NFC hardware to make instant product purchases. Coles is also introducing an NFC payment service dubbed 'Pay Tag' which the company claims will help customers to simplify their lives, save time and effectively manage their finances. This is all well and good, but why has it taken so long?
After all, near field communication (NFC) smartphone technology has become increasingly common in recent years. It can now be found in most decent Android, Windows Phone and Blackberry handsets. And yet, one of the chief advantages of this technology — contactless payments with your phone — remains a rarity in Australia.
The success of PayPass and similar technologies has proven there's an appetite for this purchasing method. Indeed, Australians are among the most prolific users of contactless card payments in the world. So why are we still waiting for NFC payments to become mainstream?
Part of the problem has to do with the enduring popularity of the iPhone, which remains an NFC-free zone to this day. Simply put, implementing NFC payments usually isn't worth a merchant's time if nearly half of prospective customers can't use it. According to a recent Telsyte Australian Smartphone Market Study, 43 per cent of smartphones in Australia run on the iOS platform. That's a lot of phones without NFC capabilities.
Commonwealth Bank is attempting to get around this issue via NFC stickers for iPhones, but this requires slapping an ugly black square onto the back of your phone, which is something many fashion-conscious iPhone users may balk at. Coles has also gone down the sticker route and has made no mention of utilising internal smartphone hardware. This means even NFC-enabled smartphones will likely require a sticker. Simply put, Apple's refusal to embrace NFC is holding up technological progress.
Despite Android's market gains, many businesses still seem to focus the bulk of their initiatives on the iPhone (an anomaly that we've touched on in the past.) CBA actually offered NFC payments to iOS before any other platform — back in 2012, it launched the ugly and surprisingly buggy iCarte case which added NFC functionality to iPhones. Android users, meanwhile, were left in the dark despite many of their phones having NFC built in.
To be fair, the fractured nature of the Android market does create its own difficulties when it comes to NFC product development. But this excuse can only go so far — especially in the face of iOS' morphing screen sizes. Google also shares some of the blame, at least when it comes to the US-only Google Wallet. Device manufacturers have also been known to contribute to the holdup by refusing to grant third-party access to the required secure element on their hardware. Nonetheless, there's no denying that many businesses in retail and banking simply don't want to know about NFC because it doesn't work on iPhone.
Hopefully, Commonwealth Bank's most recent initiative will prove successful enough for other companies to emulate. Time will tell.
Do you think Apple is partly responsible for the lack of NFC payment options in Australia? Or are we talking absolute hogwash? Make your opinion heard in the comments section below!
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