Consumers will adopt contactless technology: CommBank

The Commonwealth Bank (ASX: CBA) has estimated it will take up to a year before consumers feel comfortable with contactless credit card technology.

The Commonwealth Bank has been issuing cards with contactless technology since 2006 and has been trialling the system in Australia since 2008.

The contactless credit payment requires customers only to swipe their debit or credit card to complete a purchase of up to $100, while major stores, such as Coles, allow PIN free transactions of up to $35.

Commonwealth Bank cards general manager David Lindberg told AAP contactless, and basically PIN free, transactions were more secure than inserting or swiping a card to use the information stored on the magnetic strip which is vulnerable to skimming.

"It's a far more secure way to make a credit card payment," Mr Lindberg told AAP.

"There has never been a single incident of fraud in any single pay pad in Australia."

Contactless payments of up to $100 are being accepted at major stores and food outlets such as Bunnings, McDonalds and Red Rooster.

However, Mr Lindberg said grocery giant Woolworths' decision to embrace the technology and install contactless payment terminals would be the turning point in consumer confidence.

"One of the big announcements is Woolworths using it in their stores and that is moving the market to a tipping point," Mr Lindberg said.

"There will be a tipping point in acceptance in a year.

"The view we have is it's much like all new technology when it rolls out and at first people are apprehensive on how secure it is.

"It's no different than when online banking came out."

By not using a PIN number and merely swiping a credit card, customers would save up to 30 seconds at the check-out counter.

He said any fraud would be covered by the banks and consumers should have confidence in the system.

"Nobody looks forward to check-out and as people adopt this technology it will take one, two or three seconds to check-out," Mr Lindberg said.

"That's good for consumers, but it's really important for businesses."

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