By: Sonja Koremans
October 25, 2011 2:59PM
CREDIT cards may soon become obsolete, with mobile phones replacing plastic for instant payments.
The credit card’s march to oblivion was stepped up today with the Commonwealth Bank taking the covers off a “tap and pay” app that enables smart phones to connect with devices such as cash registers.
It also enables payment via Facebook and email.
The app – Kaching – works by information which is coded into the magnetic strip of credit cards being transmitted by the phone.
The technology – Near Field Communication (NFC) – is already used in the US where it is being expanded to replace keys, passports, business cards and receipts.
Users don’t have to be Commonwealth Bank customers to receive online payments via Facebook and email, with non-bank customers directed to an external collection site.
Commonwealth Bank spokesman David Lindberg says he wants Kaching to penetrate all markets across the Australian payments space from businesses to individuals.
â€œMobile and online social payment is the next step in transaction technology and now Australian consumers will no longer have to rely on cash or cards to make payments to family, friends or businesses, Mr Lindberg says.
He said the app would also help businesses reduce the need for cash.
The payment hardware was designed in close consultation with Apple and security was paramount in its development, CBA says.
Kaching will include password encryption technology to ensure a lost or stolen phone would not compromise a user’s personal banking details as no personal banking information is stored on the phone.
Payment receivers would also be protected, with all un-retrieved funds credited to the payer after 14 days, the bank said.
Kaching will be available before Christmas to Apple iPhone users with iOS4 and above.
Commonwealth Bank customers who download Kaching are required to register online inputting
existing bank login details and selecting an account to both receive and make payments from.
The app will then allow the user to make payments to anyone via an email address, phone number or Facebook.
Depending on the format selected for payment, the transaction will either be instant or generate a code for delivery
to the recipient allowing them to access their payment online.
NFC payments on Kaching are enabled through the addition of iCarte to the handset, allowing payments up to
$100 to be made through a tap of a phone at the point of purchase in businesses with MasterCard, PayPass enabled terminals.