Fairfax Media

ANZ moves closer towards ‘virtual’ credit cards in Australia

The Australian bank is changing up the technical and security processes in an effort to push digital wallet initiative

PUBLISHED : Friday, 13 January, 2017, 12:00pm
UPDATED : Friday, 13 January, 2017, 12:03pm

By Clancy Yeates


ANZ is moving a step closer towards “virtual” credit and debit cards in Australia, through new changes to automatically upload replacement cards for those that are lost onto customers’ smart phones.

As part of its push to drive greater use of digital wallets, the bank is revamping the technical and security processes triggered when a customer reports a card as lost or stolen.

About 670,000 cards are lost or stolen at the bank each year. Previously, replacement cards needed to be sent to customers before they could be used, a process that often takes several days.

Under the changes, people who have uploaded their credit card details onto a digital wallet on their smart phone will no longer need to wait for a physical replacement card in the mail. Instead, the new card’s details will be uploaded to their device by the bank.

ANZ, the only major Australian bank that has reached a deal to provide Apple Pay on the iPhone, hopes the move will encourage more customers to start using their smart phones as a wallet.

The change is also a move towards what its chief executive Shayne Elliott has called “virtual” credit cards - those without plastic.

Katherine Bray, managing director of products in Australia, said the change was part of a broader “road map” towards greater use of digital payments, which have taken off in recent years thanks to tap-and-go terminals.

“Virtual card replacement is a precursor to a virtual card proposition. So this is, in that sense, part of a broader road map in terms of where we take our digital payments and digital card experience,” Ms Bray said.

Even though digital wallets are yet to challenge the dominance of plastic cards, Mr Elliott has previously predicted paying on a smart phone would take over from credit cards in coming years, due to high take-up of contactless payments in Australia, and the security and convenience of paying on a smart phone.

It comes as lenders are jostling to compete on mobile banking, though ANZ has the advantage of being able to offer Apple Pay, as its rivals are engaged in a bitter fight with the global technology giant.

NAB also last year announced plans to allow tap and go payments on a smart phone without a physical card. However, NAB and other banks that have not reached a deal with Apple instead ask their customers with iPhones to attach a tag to their phone to make tap-and-go payments.

For those who prefer plastic cards, the changes from ANZ will also mean customers receiving a replacement card will not have to program a new PIN into the card when it arrives.

Use of plastic cards still dwarfs use of digital wallets, which were used in 8.6 million transactions by ANZ customers last year. But Ms Bray said that once many of the bank’s customers used a digital wallet, use of the smart phone took over entirely from plastic cards.

ANZ says it cannot disclose figures on how many customers are using Apple Pay, but it argues the technology offering is helping it sell more products including credit cards, loans and accounts.

Banks believe a potential catalyst for greater use of digital wallets could be the introduction of tap-and-go payments in Sydney’s public transport system, planned for this year.

ANZ moves closer towards ‘virtual’ credit cards in Australia