Convenience is King when it comes to Contactless Mobile Payments
Press Release – 1 June 2008
Global mobile banking and payment solution provider M-Com has successfully completed its inaugural mobile proximity payment trial using standards-based contactless technology. M-Com believes that the findings from the pilot demonstrate consumer and merchant appetite for using mobile phone device-based payments at the point of sale as an alternative to existing payment instruments.
When it comes to electronic payments at the point of sale, New Zealand is undoubtedly the leader in adoption, penetration and usage. "Boasting one electronic POS terminal per 35 citizens, over 300 card-based POS payments per capita and the lowest unbanked population in the world, New Zealand is the ideal place for us to innovate when it comes to mobile payments" claimed Adam Clark, CEO and Founder of M-Com.
The trial was run in conjunction with Paymark (New Zealand's largest payment switch) and retail bank ASB (a subsidiary of Commonwealth Bank of Australia). It included about 100 bank employees who were enabled for contactless mobile payments and several fast food merchants (cafes). Consumers on both CDMA and GSM networks downloaded a mobile wallet application onto their mobile phone over the air which enabled them to store funds under the brand SwiftPay, top up accounts and view balance and recent transactions. To enable transaction processing, merchants were each given a contactless point-of-sale reader which was connected in real time to the M-Com transaction management server – PayAnywhere.
Paymark provides the infrastructure behind the service, and CEO Simon Tong explains that the implications and opportunities for its use are limited only by imagination. "In creating this system we took the opportunity to integrate learnings from similar technology being used around the globe. The goal was to create a world-leading system within an infrastructure that is as safe, secure and reliable as all of Paymark's offerings. It has the potential to revolutionize the future of electronic payments in New Zealand – particularly micro payments."
"The findings confirm what we have always believed about payment channels – convenience is king" claims Clark. "Convenience and ease of use were considered the biggest drivers of preferred payment instruments for consumers prior to the trial, and over 75% of participants declared afterwards that the contactless mobile payment experience was more convenient that card based and cash transactions".
Cash was the most substituted payment instrument during the M-Com trial, largely due to the low average transaction size during the trial (coffee and snacks were the most frequently purchased items). Users also stated that they had an interest in applying contactless mobile payments across other regular purchase types they partake in – namely; parking (72%), vending machines (69%), public transport (63%) and convenience stores (61%).
"Participating merchants felt that once the technology was in place, including staff familiarity, it delivered a faster and easier payment process for their low value transactions. Ultimately, they were able to push through more purchases, which means more revenue and more profit" added Clark. "What differentiates this from similar trials carried out elsewhere in the world is that participating consumers were able to immediately review their transactions using an application on their phone and prove to themselves that they technology was working in real time."
M-Com is currently working through assessing the technical feasibility of various near-field communications (NFC) deployment models. Later in 2008, M-Com plans to integrate its contactless payment capabilities into its mobile banking platform – BankAnywhere – to enable retail banks to seamlessly offer mobile banking and payment services to consumers off a single technology investment.
Earlier this month, M-Com announced the launch of its first major US implementation with Seattle-based Washington Mutual (WaMu – the 5th largest bank in the US by retail deposits).
About M-Com: Founded in 2000, M-Com is an international mobile banking and payments solution provider with live Fortune 500 banking customers in Asia Pacific and the USA. M-Com's core proposition is centered on delivering world class adoption metrics for the mobile channel, whilst reducing the total cost of ownership of retail banking channels. Contact: Serge van Dam, Head of Marketing, +1 678 369 0602, serge.vandam@mcom.co.nz, www.m-com.us.