Westpac will allow small business customers to accept payments made through Android phones and tablets from early next year, and they would be able to offer credit or debit card “tap and go” without buying or renting a terminal.
Westpac’s use of consumer handsets for business payments forms part of its strategy to fend off Square, part of Block, which has eaten into the “merchant acquiring” business of the big banks by offering easy-to-use payment dongles that connect to smartphones.
Westpac Tap on Phone will allow SMEs to accept secure, contactless payments from Android mobile phones or tablets.
Westpac will become the first bank to offer a standalone, point-of-sale application to capture payments on Android devices. It uses “Airpay TAP” technology built by payment technology company Quest Payment Systems.
Chris de Bruin, Westpac head of consumer and business banking, said this would make it easier and faster for small businesses to take payments. The bank hopes that food delivery drivers, tradespeople, or those running stalls at markets would find it beneficial to use phones or tablets for payment purposes. It reckons that this will be more convenient because customers will not have to bring a separate device, or remember to charge it.
Westpac has not determined how the new service will be priced when it hits the market early next year, once accreditation from eftpos comes through. The strategy risks cannibalising some bank terminal sales, but Westpac believes the app will attract new customers to digital banking by encouraging them to move away from cash and could lure some away from Square.
The Payment Card Industry (PCI) Council is finalising so-called MPoC standards that allow payments to be conducted on mobile devices. Westpac has had its app certified with Visa and Mastercard.
The move comes five months after Apple announced that it would turn its iPhones into payment devices in the US this year.
In February, Apple said it would introduce “Tap to Pay” on iPhones as it encouraged app developers to integrate payments into iOS apps. Stripe will be the first payment platform to offer Tap to Pay on iPhones to its business customers, including Shopify. Apple has not said whether this will be rolled out to Australia.
The Westpac and Quest solution works on Android because banks can access the “near field communications” (NFC) chip, which communicates with cards and digital wallets, something Apple prevents on its iPhones unless transactions are routed through its digital wallet.
In February, Westpac said it would issue 100,000 lightweight, mobile “Eftpos Now” terminals to small and medium-sized enterprises. That came four months after Commonwealth Bank announced a similar upgrade to its ageing Albert fleet. CBA also has a Square-like dongle for small business payments that plug into smartphones.
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