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Phone payment technology: how it works and is it secure?


Patricia Babalis

By Patricia Babalis

4 min read

Smartphones are now a fundamental part of most people’s lives. They take our photos, help us catch a train on time and tell us when it’s going to rain. Now, they even pay for things.

Phone payment options have been launched by major banks around the country and are rapidly evolving to become more and more convenient.

For many people, the main barrier to ditching the wallet in favour of this technology was concerns around security, but with more stringent checks and balances than credit cards, security is fast-disappearing as a roadblock for many Australians.

What are phone payments?

The phone payment process initially involved a small PayTag chip that had to be attached to phones and used in the same way as a debit card PayPass function. You could tap and go for purchases under $100 dollars using the chip which directly accessed your transaction accounts.

Now, for many phone users, the process is far more high-tech. Android phones enabled with Near Field Communication (NFC) technology can now tap without a chip, although purchases over $100 will still require your pin number.

How secure is it?

Late-technology adopters will probably still liken the safety of such systems to posting their credit card details on an online forum, but the reality is, these security measures are in place to protect your funds. Pin passwords protect the tap and go function from being opened by anyone without the code and some apps also allow your fingerprint to be added as a further security measure.

Having a passcode on your smartphone to begin with is also yet another way of protecting your money. The more complex the better so steer clear of the commonly occurring 1234 and 0000 combinations.

Apart from these smartphone specific security measures, all your bank’s standard protections should apply. These include usual policies for counterfeit and fraudulent transactions that generally involve a refund for purchases not made with your permission.

As well as this, losing your phone has become much like losing your credit card in that with one call to your bank, you can cancel all further transactions and access from your phone.

To check your bank’s Mobile Pay security policies in depth visit their website so you have a good idea of the protections available.

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What are the benefits?

The major selling point of the technology is that you don’t have to worry about forgetting or losing your wallet.  These days, most people never leave their smartphone out of reach so the chances of you not having your phone on you in a store are low. Of course this could lead to more impulse purchasing, depending on what kind of shopper you are, but the convenience is undeniable.

You can even use your phone to withdraw cash in emergency situations with banks such as ANZ allowing you to make withdrawals at certain Mobile Pay enabled ATMs. Cardless withdrawals can also be made at ATMs if you are with certain banks, such as Westpac, by simply getting a code from your app and entering it in the ATM.

Essentially your phone can now do everything your card can and is just as secure. In fact your phone can actually one up your card because you can have multiple card details and access on one phone.

While the access you have to these different technologies will vary depending on which bank you are with it’s something to keep in mind when evaluating your transaction account. If you want access to these smartphone perks you may need to consider switching banks to one with phone payment options.

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