Coles Is Trialling Phone Payments Now, Which Is Stupid

I often catch myself dreaming that one day we will live in a world where everyone will be able to pull out their phone, wave it against a terminal, EFTPOS machine or even petrol pump without having to open any sort of app and be on their way. Coles today revealed it's experimenting with a 60-person trial of SIM-based loyalty and rewards payments which is on one hand excellent, but on the other, diabolically misguided.

Paying for stuff via your phone is slowly being relegated from the realm of vaguely possible future-tech to the land of dreams, candy hearts, unicorns and rainbows. Several institutions have had a red-hot go at getting payments working via phone, including the Commonwealth Bank which released cases for people's iPhones and an app which didn't really do anything for the good folk on Android.

According to The Australian Financial Review, Coles now wants to try its hand at it, giving 60(!!) people around the country fancy new SIM cards that -- with the assistance of an app -- will let them pay for stuff at the checkout with their phones, while automatically provisioning things like FlyBuys reward points at the same time. Woo.

For a mobile-based payments system to actually work, you'll need the support of Google as well as Android phone manufacturers that build NFC into their phones. You see, you can't make secure payments on your NFC-enabled Android smartphone right now because manufacturers won't hand over the keys to what's known as the secure element. That's the special sauce that safeguards your money when it's being transferred between your phone and a terminal. Without that, people like the Commonwealth Bank and Coles can't actually secure the money going from one place to the other, so there's no point embarking on native NFC trials for Android.

That's why CommBank release NFC-enabled cases for iPhones, and why Coles is using a SIM card as the secure element rather than that of a native NFC chip.

So who can save us from our band-aid-style mobile phone payment problem? Probably Google if we're all honest with ourselves.

Google Wallet has the support from major card providers as well as financial institutions -- something big banks in Australia haven't even been able to do --

The only problem with that -- and it's quite a big one -- is that Google Wallet will never come to Australia. Ever. If it does, I'll stand naked in Sydney's Pitt Street Mall draped in a Google sandwich board handing out flyers for Wallet. Get me Larry Page's hand to shake and it's a bet.

Back to Coles, however, which is just another half-baked trial being piloted by a big corporation as an attempt to be seen doing something about phone-based payments, rather than actually building something we can all use that works. If Coles really wanted to give you all phone-based payments, it wouldn't tell the mainstream media in a carefully prepared PR exercise that 60 people are trialling it around the nation. It would jealously guard that secret trial and work on it until it was perfect before blowing us all away with a new way to pay for things at the checkout.

The future for phone-based payments looks dark, indeed. [AFR]



    you can’t make secure payments on your NFC-enabled Android smartphone right now because manufacturers won’t hand over the keys to what’s known as the secure element.

    Citation needed. I'm still unconvinced that this particular method of handling information transfer securely is the only acceptable method for moving info backwards and forwards for transacting. Commbank spilled feelings all over the place about it, but surely there is a way to do some sort of HTTPS challenge/response in conjunction with the NFC read or something along those lines? I'm not an expert on mobile payment systems or nearfield comms but the idea that one single way exists to securely use proximity based payments is so thin that it's see-through.

    I suspect (and again, not an expert) it's just the cheapest, or the one that requires the least effort.

    Last edited 19/02/13 9:51 am

    Using a SIM card? So in order to use it, you'd have to have a Coles branded phone account as well. Thanks, but no thanks.

    If you have ever gone through the auto checkout and paid with a paypass enabled card then you will know just how good it feels to get the hell out of there as quickly as possible, you wonder how you ever lived with out it before!

    Japan has had the ability to pay for things by swiping your phone for at least the last 7 years! Surely Australia isn't that far behind in the technology stakes?!

      Japanese live in the future.

        The glorious fax-machine-filled future.

      This kind of thing makes me feel slightly embarrassed to live here, TBH. I have no idea why but I feel like we're a bunch of luddites in this country when you consider how long it takes us to adopt, and then how much longer it takes to get the 'kinks' out of the system, and then you usually find out that it's been working perfectly somewhere else in the world for X number of years.

      I'd still love to know though why this actually happens; why is Luke so certain that google wallet will never come to Aus?

    Articles like this really annoy me. Unfortunately for me, the Author is probably correct. I do think though that that these common-place corporate Australian half-backed walled-garden sure-to-fail corporate-wank of an innovation type ideas do contribute something; they drive acceptance and demand among the population.

    Who knows, maybe once we've all had a go and been thoroughly annoyed by a Coles SIM card payment system that's sure to cost more and not work most of the time, maybe we'll expect a universal solution and then Google or the like might be able to get somewhere in this market...

    Until it's actually faster to use my phone than pull out my paypass card, I won't be using it. It's false economy otherwise.

    Why bother pulling out my phone, entering a PIN, opening up the app, entering another PIN and swiping my phone, when I could have just pulled out a card?

    I'm happy with PayWave.. it's quicker than the previous method and is just about as useful as the phone version.. you still need to fumble to get out your phone to make the payment.. how is that any different than pulling out your wallet/purse and tapping your card on the machine...

    Didn't Windows Phone do NFC slightly different that was supposed to get around the Android NFC issue described in the article?

      Yep, you still require the special Secure Sim that is mentioned in the article - but apparently that's the only barrier to using, say, your Nokia 920 to tap and pay (atleast from what ive been able to dig up from official support forums and threads).

    This is the stupidest idea I've ever heard. What happens when Woolworths decide to offer something similar? Will we need to carry 2 phones? Swap our SIMs constantly? Restrict ourselves to shopping at one supermarket?

    Add in every other retail chain that might try the same stupid scheme and it will prove useless. Way to go Coles!

    anyone know why google wont share the keys or allow additional keys to be stored in the nfc chip? scared of it being hacked? wants to keep all the monies for itself?

      Hacked is essentialy give away the source code it won't be very secure for long.

    Not just Google and Android handsets Luke, the 920 and most Windows 8 handsets come with NFC payments baked into the OS. You just need the secure Sim to be able to use these features apparently from reports i've read.

    There is also the option of additional support via apps that will also allow you to check your balance, statements etc all from within the Wallet. Been dying to try out this feature of my 920 but as you well noted - lack of support is painful.

    Google may be the big player and potential company to change the game. But MS already has products over here along with the support baked in - in think that would be our better option right now.

    Bank employee here: our payments team is actively canvassing alternatives to native NFC because of issues mentioned above.

    One alternative to secure SIM is a sticker with the same tech as your credit card. Slap it on phone (or battery if cover comes off) and you're away. Only catch is as it carries same info as a physical card if you lose the phone your plastic needs to be replaced too.

    It seems a pity that Google won't give access to the secure element. Australia is very close to embracing contactless payments outside of credit cards but the technology won't keep up for a change.

    The author of this piece has just proved the old adage that "a little knowledge is a dangerous thing".

    There is a whole global NFC industry out there, hashing out these issues and making it work.

    The Australian Market is a unique market place with very different restrictions than anywhere else and a dominant Banking society that doesn't like to move quickly.
    This being said, there are companies out in the market looking at this idea. iZettle ( is one to watch which is hailed as the Square of Europe with NFC tech, or a new Australian based company that just finished raising a larger amount of capital. ( They have NFC card reader and a wallet in development.

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