Optus turns your customer's Android phone into a credit card

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Optus turns your customer's Android phone into a credit card

If you're a retailer and don’t have contact payment terminals in your store, it's time to look into updating your point of sale terminals.

Instead of having to swipe or insert a credit or debit card, contactless payment systems like PayWave let your customers tap on a terminal and, as long as the transaction is under a particular threshold set by you, their payment is accepted in a second or two.

This all works using a technology called NFC, or Near Field Communications, to transmit information from the card to the point of sale terminal.

Optus has developed an Android app called Cash by Optus that uses the NFC radio in many smartphones to enable payments using a compatible smartphone.

Firstly, your customers need an Optus postpaid mobile account, a compatible Android smartphone and a NFC enabled SIM. Optus will send them a SIM on request.

Once they install the app they can load their Cash by Optus account with up to $500. We like this limit as, if their phone is lot or stolen, there's a limit to how much money can be spent before they close the account - which they can do by calling Optus. The service works through a partnership with Heritage Bank so there's a transaction dispute process if your customers need to question some activity.

When they shop, they tap their phone on a PayWave terminal to make a payment. Transactions are limited to $100 so it's handy for small purchases.

The app allows them to check their account balance in real time and make payments to online stores.

What other ways are there to do this?

Apple Pay brought this style of payment into the news although it's not yet available in Australia and will be limited to Apple's devices.

Several banks have experimented with and tested smartphone payment systems although many require putting an NFC sticker on the phone even if the device has an NFC radio - an ugly kludge in our view.

In the United States, a number of major retailers have turned off contactless payments in stores in order to block the use of ApplePay in order to drive customers towards their own payment system called CurrentC. But it's already dogged by controversy as customer data has been stolen even before the system has properly launched.

What does it mean for retailers?

If you're a retailer and don’t have contact payment terminals in your store, it's time to look into updating your point of sale terminals.

If mobile payment systems such as Cash by Optus and ApplePay become mainstream you'll have customers entering your stores without any credit or debit cards, expecting to purchase goods using their smartphone as the payment device. It's that simple.

For example, here's what one Reddit reader did when they shopped in the US only to find the store didn’t have contactless payments.

"I never carry my wallet around anymore, just a $20 emergency and my license in a CC holder case...So if you don't accept my preferred payment which is Visa/MasterCard then screw you. I can't even use the NFC on my CC anymore either??

I actually went into a retailer (CVS) and tried to use my payment and it didn't work, they asked me if I have another payment and I told them 'this is all I carry now' and you can return the items to the shelf and walked out..."

The advice is simple - be ready for contactless payments or be ready for customers to walk out.

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