Commonwealth Bank launches 'Kaching' for mobile payments

The end of the credit card? Commonwealth Bank has turned to the latest technology to launch a new payment system.

In Australia, however, Commonwealth Bank has already taken the leap, launching a 'tap and pay' application, Kaching, which allows smart phones / iPhones to connect with cash registers and to make payments by email and Facebook. It will be available before Christmas to iPhone users with operating system iOS4 or above.

Consumers will be able to pay for any product anywhere, and those receiving mobile payments will not have to be existing Commonwealth Bank account holders.

Spokesman David Lindberg noted that "mobile and online social payment is the next step in transaction technology". Businesses would have less need for cash, he added; especially if there are banking costs associated with it.

The Near Field Communication technology (NFC) implemented in this system is already used in the USA, and is being employed in Google's 'Wallet' app, which hopes to fulfil a similar function. Commonwealth Bank's launch makes it the first commercial provider using NFC.

Payments on Kaching are enabled through adding iCarte to the handset, which allows purchases up to $100 to be made by tapping a phone where MasterCard PayPass facilities are present. It is estimated that there are 42,000 such readers and more than 7 million MasterCard PayPass cards currently in circulation.

Scepticism of mobile payment systems in the UK has been driven by security concerns. It is unsurprising, then, that CommBank reports security as having been paramount in the development of the system. Kaching includes password encryption and no personal banking information is to be stored on a user's phone.

Commonwealth Bank claims to have over 6 million online banking users, and to have received in excess of 16 million log-ons from a mobile device in August alone.

Is this the end of the traditional credit card? Do you feel comfortable about this turn to mobile payments? Drop us a comment and let us know!