Daily Review: Which Are the Three Major Hubs of Innovation Adoption in Payments?

Australia is fast becoming a less-cash society, a report by the Australian Payments Network said in May, noting how ATM withdrawals fell by 22% in the past five years amid declining use of cash. Australians are embracing the convenience of contactless technology, which is contributing to the rise in card payments.

Pick #1. Westpac launches wearable payment band

In lieu of the news, Westpac reports that adoption of wearables is predicted to grow. About 37% of Australians would be wearing a smart wearable – bands and smartwatches – by 2020, up from 14%, as new products are rolled out.

Westpac hopes to get the wearables payment bandwagon onboard with its new contactless PayWear tap-and-go band. Westpac’s devices – which were flagged in March as the bank did a pilot testing program with employees – are waterproof and battery-free.

Customers need to use Westpac’s everyday banking account and its debit Mastercard with PayWear, which works with existing contactless payments terminals in stores.

Similar to PayWave contactless payments cards, there is no need to use a companion device like a smartphone or watch for transactions.

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The wearable is not the only move by Westpac to up the ante in payments. In partnership with the largest banks in Australia, Westpac is launching the Zelle of Australia – called Beem.

Pick #2. NAB, Westpac and CBA team up with new payments app, Beem

Three of Australia’s banking giants are joining forces to allow instant payments between people to small businesses via a smartphone, with plans to ultimately roll out a cross-industry digital wallet.

By the end of this year, Commonwealth Bank, National Australia Bank, and Westpac will launch a mobile app aimed at allowing payments such as splitting a restaurant bill or paying a tradesperson.

The service, known as Beem, will be free and made available to any customer (irrespective of their bank) and will function on iPhones and Android phones. The app will be the first service offered by a new digital payments joint venture that has been formed between CBA, NAB, and Westpac.

The app promises to process payments instantly, as opposed to the current system that can take up to three days if customers are from different banks.

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Meanwhile, one of the hottest FinTech hubs in the US, and globally, New York, is on the verge of its own breakthrough. The Metropolitan Transportation Authority (MTA) Board voted to approve a USD 570-million-dollar project to phase in a new contactless fare payment system. MTA riders will be able to use a mobile wallet or a contactless card at turnstiles starting in mid-2019, with the MetroCard to be phased out by 2023.

Pick #3. MTA gets ready to dump the MetroCard

Within 18 months, a contactless system will allow riders to wave their credit card or phone near a scanner to pay the fare at 500 turnstiles and on 600 buses, the source said. Riders will be able to use the methods in all entryways to the system by 2020, they said.

After that, the MTA will release its own tap card, so that riders can then choose between using that and their own credit card or phone.

The new system will be similar to how London, Chicago, and Toronto deal with fare payment.

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Announced in May 2017, an industry-wide image-based check clearing system is being rolled out today, speeding up the check deposit process for bank customers across the UK.

Pick #4. Image-based check clearance goes live today: which banks do it and how it works

A new software being introduced in some banks and building societies this week, and fully implemented across all providers by the second half of 2018, will allow the UK check users – who cashed 477 million payments last year – to clear a check within 24 hours.

Banks including Barclays and Lloyds have already tested out imaging technology on their customers, but currently, only their own checks can be paid in. This UK-wide system will mean checks can be cashed in even if the check writer is from a different bank.

At the moment, when an individual receives a check and they deposit it at the bank, it can take up to six days for it to be processed through the clearing system. The new image-based check clearance, however, will take less time. Customers will still write paper checks as they do now, but when they take these to their bank or building society, the cashier will take a picture of the check which will then be exchanged electronically through the new system between the relevant banks and building societies.

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