With complex processes and multiple parties, determining the costs of payments can be difficult. In recent years, the Reserve Bank of Australia (RBA) has taken up the challenge and released a research report on the cost of payments in Australia. This represents a long-awaited follow up to research last done in 2006. The most recent RBA report dated December 2014 draws upon data collected in 2013 from financial institutions, businesses and consumers and seeks to quantify the overall cost of payments and the cost of various payment methods. This includes both “resource costs” (the costs to the whole economy) and “private costs” (the costs borne by consumers, merchants and financial institutions respectively).
The RBA recently published its 2016 Consumer Payments Survey. Key findings were that survey participants made 37% of their payments with cash (compared to 69% in 2007) and 52% of their payments with a card (compared to 26% in 2007). This trend is, of course, unsurprising; AusPayNet has been monitoring the shift to digital payments for some time through its Milestones Report.
Ever-changing payment terminals
What is often overlooked though is the commensurate change in the experience at point-of-sale (POS). Years ago, our experience at POS involved beautiful, old cash registers. Over time, these were replaced by paper-based card imprinters (known as “click-clack” machines), then by “swipe and sign” machines and chip and PIN card readers, and now by contactless.
With these changes, the security around payments has migrated from physical security (think lock and key), to hardware security, and increasingly to software.
There has been a lot of focus on consumers using virtual cards on mobile phones to make payments – Android Pay, Apple Pay, Samsung Pay etc; we can expect this to be mirrored by merchants using mobile phones to take payments. Mobile phones have been used by merchants for some time for POS communication, and now pilots are underway around the world that use mobile phones to read payment data.
Standards and security in payments
Security standards, like standards in other areas – Biometrics, Blockchain, Data, – will need to innovate as payments themselves innovate. AusPayNet has a new process for considering non-standard card technologies, to encourage innovation, and to address emerging technologies while limiting the potential for fraud.
Our work on standards will ensure that consumers can continue to make payments – and merchants take payments – in the knowledge that there is appropriate security safeguarding sensitive payment data. While the mechanisms for payment may be different – mobile and software rather than dedicated POS terminal and hardware – security remains sacrosanct.
To read more on AusPayNet’s device evaluation and approval process and to download the PDF of the IAC Process for Consideration of Non-Standard Technologies, click here.
Our work on standards continues when we participate in Standards Australia’s Digital Transaction Technologies Forum on 29 September 2017. We invite you to follow AusPayNet on Twitter @AusPayNet and LinkedIn for the most up-to-date developments.