Samsung joins Visa for mobile payments, Australian rollout could take a while

Long after many in the tech industry believed contactless payments in phones would be the norm, a new partnership between technology giant Samsung and payment group Visa may lead to more widespread adoption of using phones as wallets.

The move comes as Australian merchants have already spent the last two years rolling out contactless payment technology, which is now available at several major retailers including supermarkets, petrol stations and fast-food chains.

But local experts suggest it might be a while before Australian users start using their phones to pay for anything and everything.

“We anticipate the initial adoption of contactless payments to be relatively slow in the next six to 12 months, until [contactless technology] is more widely available on mobile devices later down the track,” Telsyte analyst Alvin Lee told SmartCompany.

Announced at the Mobile World Congress in Barcelona, the biggest mobile technology event of the year, Samsung said handsets containing contactless technology, known as Near Field Communication (NFC), would be able to connect to Visa’s PayWave systems available at several merchants around the world.

Samsung and Visa say the benefit from the system comes because the technology will be embedded in the phone, rather than sold through a case as a separate accessory.

“Samsung devices enabled with Visa payment functionality will no doubt be a powerful product offering – especially in markets where paying with a mobile device is becoming commonplace,” Visa head of products Jim McCarthy said in a statement.

“The key to making mobile payments broadly available all over the world is to offer financial institutions a secure way to provision millions of smartphones with payment account information yet.”

However, Samsung said the technology will be included in future phones, and none that are available now will be included in the partnership.

The announcement comes as a large number of players attempt to enter the mobile payment space. Google operates its Google Wallet app, which works with NFC-enabled phones, although few users have access to them.

Australian banks including the Commonwealth Bank and Westpac have experimented with using NFC in SIM cards, but these experiments are widely regarded as too expensive.

While merchants have adopted the technology for use with contactless credit cards, the move to mobiles has been slower. Some experts say contactless payments won’t take off until the iPhone – one of Australia’s most popular phones – ships with NFC capabilities.

Lee says the complicated nature of the payments system is an issue.

“Many are involved in the industry, such as hardware vendors, carriers, banking institutions, credit card providers and merchants, so the complexity of the ecosystem has been one of the reasons delaying the roll out.”

Lee says with NFC technologies only available on high-end devices, and Apple “still sitting on the fence”, Telsyte expects the rollout to be slower until more mobile devices carry the technology.

“While Visa’s partnership with Samsung and carriers like Vodafone and Optus will showcase the capability and convenience of contactless payments via mobile devices, security concerns of general public should also be addressed in order to drive the uptake.”

This story first appeared on SmartCompany.