Today electronic payments are the norm in Australia. In the direct entry system, there are about 7 million items per day equal to about $45 billion. Employers and governments use direct entry to pay wages and benefits, while individuals use direct entry to pay for goods and services through direct debits and internet banking. These direct entry payments, which include direct credit and direct debit, account for 96 per cent of non-cash value (excluding high value payments) and about one-third of the number of non-cash payments. From these figures, one would suspect that Australians are reasonably prolific users of electronic payments, which stands in contrast to some commentary that Australia is somehow “lagging behind” other countries in this respect.
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.