Independent Banker - September 2018 - 35

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the increased purchasing frequency also leads to
new data ... which can be converted into insights
and drive further revenue through cross-selling
or promotional activities. "
cost of contactless payments.
" When contactless was fi rst becoming the
Success factors
Yeo agrees that high availability of both cards and
readers was key to the boom in Australia.
" Adoption at food and beverage outlets and
convenience stores is often a key driver in usage, "
he says. " These are venues where total purchase
values are low and convenience for the customer
is highly valued. During a busy lunch hour or
commute to work, being able to pay as quickly
" [Contactless cards] can
drive significant revenue
advantages for banks
over their traditional noncontactless
brethren. "
-Michael Sek Pheng Yeo, IDC Financial
and Retail Insights, Asia/Pacific
as possible without the usual card purchase process
or fumbling with cash is something which is
highly appreciated. "
Bronwyn Yam is the director of product at
USD$105 million-asset Australian business bank
Tyro, which specializes in providing services
for small businesses. Yam says that contactless
is supremely convenient in Australia because
there's no upper limit to transaction amounts,
and payments under AUS$100 can be conducted
without entering a PIN.
Tyro is a relative newcomer to the market.
Although it started out as a fi ntech payment gateway
15 years ago, it received its banking license
three years ago and currently has more than
20,000 small to medium-sized companies on its
books. It has distributed about 30,000 payment
terminals to its clients, and was the fi rst in Australia
to adopt a " Tap & Save " solution that the
fi nancial regulator is introducing to reduce the
norm for how payment transactions were done
by card, " Yam says, " only Visa and Mastercard
had enabled their networks for it. There was a
defi nite pricing diff erence between the international
networks and the domestic ones. "
The new Tap & Save solution uses the lower-cost
national debit payments system,
which results in lower fees for merchants,
Yam continues.
It may be a while before street performers in
Los Angeles or New York ask you to tap rather
than tip, but U.S. community banks are encouraged
to start investigating the implications now.
Experience around the world shows that when
consumer preference changes from chip and
PIN to contactless, it changes fast.
" In hindsight, if you look at how quick the
adoption of contactless was in Australia, we
would have migrated merchants onto newer
terminals much faster, " Yam concludes. " It
took time to communicate to merchants what
was happening. "
Adam Oxford is a writer based in Johannesburg,
South Africa.
What percentage of Visa
payments are contactless?
Quick stat
78.4
million
Estimated
contactless
cards issued in
the U.S. in 2018
Source: ABI Research
Australia
92%
Singapore
63%
Canada
47%
United States
0.6%
Source: Visa, September 2017
independentbanker.org Q 35
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Independent Banker - September 2018

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