In recent years, cash payments have declined in use as people turn to digital means for making transactions. The Reserve Bank of Australia reports that 10% of Australians have admitted to making at least one mobile payment during the week they were surveyed in 2019. This was double the number from just three years before.
So just what are mobile payments, and what mobile options exist for consumers and businesses in Australia? Let’s take a look.
What are mobile payments?
At the heart of it, a mobile payment is simply a payment made using a mobile device instead of cash or a physical card. These digital transactions can take many forms: transferring money directly to someone via ebanking or tapping your phone on a payment terminal at a store, for example.
Find out the major mobile payment options for Australian consumers and businesses a little further down.
What mobile payment systems and mobile wallets exist?
Since a mobile payment is any payment you make with a mobile device, it includes everything from credit card payments via SMS, WAP (Wireless Application Protocol) billing – where charges are applied directly to your mobile bill – and more.
But the most popular mobile payment systems are mobile wallets. These are essentially apps for smartphones and other devices that allow you to add a credit or debit card and then tap your phone to pay using the same credentials as the physical card. They may also require a quick ID verification like a fingerprint at purchase.
Most major banks in Australia offer credit and debit cards that you can add to one or more of the mobile wallet systems listed below. To find out whether your card is supported by a certain app, check the app’s bank partners, which should be listed on its website.
- Apple Pay (compatible with iPhone, iPad, Apple Watch and other Apple devices)
- Google Pay (compatible with Android devices running Lollipop 5.0 or higher)
- Samsung Pay (compatible with Samsung devices newer than S6)
- Fitbit Pay
- Garmin Pay
Of course, there are also bank-specific digital wallets, such as Tap and Pay from CommBank or NAB Pay. Be aware that these are more limited because they usually only work with cards from that bank.
Mobile payment systems for businesses
If you’re running a business and want to be able to accept mobile and contactless payments, you’ll need a point-of-sale device known as Near Field Communication (NFC) technology. This means that it can communicate with cards and devices that are a few centimetres away and can exchange the necessary information to complete a purchase.
The four popular mobile payment systems listed below are focused around in-store transactions. If you’re interested in online payment gateways for your business, refer to our page on online credit card payments instead.
- What: Standalone and integrated EFTPOS machines
- Transaction fees: Pricing customised to each business
- Features: Contactless payment, swipe/chip payments and Dynamic Surcharging
- Price: $29 or $39 monthly rental fee excl. GST (depending on the machine model)
Tyro offers two EFTPOS machines – a countertop and mobile option depending on your business. Pricing is customised to each business. There's no lock-in contract, so it's easy to see if Tyro EFTPOS is right for you.
- What: Keypad-less card reader connected by Bluetooth to phone or tablet
- Transaction fees: 1.9% (or 2.2% for manual-entry payments)
- Features: Contactless payments, swipe/chip payments, comprehensive point-of-sale app and tips
- Price: $59 + GST (includes free magstripe reader for cards)
Square offers some of the best features of any free point-of-sale app. Along with charging no monthly fees, it lets you create custom discounts, send invoices and maintain a product library plus many other useful features. You can also add employees as individual users with limited permissions for an extra $35 per month. Square can be particularly useful in retail and hospitality settings.
- What: Card reader connected by Bluetooth to a device with the PayPal Here app
- Transaction fees: 1.95% (or 2.9% + 30c for manual-entry payments)
- Features: Contactless payments and swipe/chip payments (but not EFTPOS)
- Price: $90 + GST for the reader
If you already use PayPal for everything, using the PayPal Here device could be the next natural step. It has no monthly fees, and money is available immediately in your PayPal account. A big downside for Australian businesses is its lack of support for payments made through the EFTPOS network.
Albert (Commonwealth Bank)
- What: Standalone seven-inch tablet
- Transaction fees: A fixed monthly fee that scales with turnover (starts at $60 per month)
- Features: Contactless payments, swipe/chip payments, barcode scanning, receipt printing, split bills and tips
- Price: Rental included with merchant plan (additional tablets are $29.50 each)
The Albert tablet works by charging you a fixed monthly fee that increases with your monthly turnover. Additional purchases past your agreed-upon turnover will attract a 1.5% fee. It supports a bunch of different business apps but is expensive for businesses that aren’t already making a fair amount of money.
How secure are mobile payments?
Mobile payments are highly secure, though actual security features vary. Some widely-employed security features include the following:
- Tokenisation. Mobile payment apps replace your actual card data with a randomised 16-digit number that shares the last 4 digits of your credit card. This prevents secure data being exchanged during a purchase and is why your card details are shown as something like “**** **** **** 1234” when saved on payment sites.
- Biometrics and passwords. Mobile wallet apps will commonly require some form of identification when you tap to make a transaction, such as face verification, a thumbprint or something else.
- Fraud protection. Most banks will note down suspicious transactions recorded on your card and freeze further payments until you confirm the transactions were yours. There are also various systems in place from banks and online merchants to refund money lost through fraud that isn’t your fault.
What if someone takes my mobile phone?
If someone gets their hand on your mobile phone, they shouldn’t be able to do much if they can’t get past your lock screen. However, if they do, they will likely be able to make tap payments with your mobile wallet if you haven’t set up biometric checks like a fingerprint or face scan.
When you lose your phone, your best bet is to contact your bank so you can freeze payments until you can recover your phone or lock your card.
If you want to know more about protecting your cards and accounts, check out this Finder guide for tips on how to avoid scams and other security issues.