Commonwealth Bank of Australia has upgraded its CommBank mobile banking app for Android and Windows 8 devices such that its customers can use it for mobile banking and mobile purchases.

CBA customers who use the CommBank app and have Samsung Galaxy S4 phones can now use them to make purchases wherever MasterCard PayPass contactless payments are accepted (there are 99,000 merchant locations and 220,000 terminals in Australia that take PayPass, and one out of every three payments in the country is contactless, according to Mung Ki Woo, group executive, mobile and industry alliances at MasterCard). The phones have an embedded secure element and near-field communication antenna to handle the transmission of data between mobile device and merchant terminals or kiosks.

Customers who don't have a Galaxy S4 will be able to buy a sticker and affix it to their Android or Windows 8 smartphone, to the same effect.

One thing that's notable about this new technology and partnership is that it couldn't happen here. In the U.S., telecom carriers control the physical hardware in mobile devices. If they don't want a manufacturer to embed its own secure element, which can be used to store, among other things, credit or debit card information, they can simply veto it. The Isis initiative, run by the telecom carriers AT&T, Verizon and T-Mobile, has its own mobile wallet that provides contactless payments.

But in Australia and some other countries, the carrier isn't king, consumers are less tied to phone contracts and more free to purchase their own devices, and banks and card networks can work with the secure elements phone manufacturers embed in their hardware to create apps that work with their hardware. MasterCard has enabled 32 mobile devices to be certified for mobile contactless services.

But this is the first deployment in the world to use an embedded secure element in a phone, Woo says.

The next markets in which MasterCard plans to approach banks for similar rollouts are Russia, Ukraine and Turkey, where phones are sold directly to consumers.

For this rollout, CBA is extending a 100% guarantee on all transactions, Woo says.

CBA worked with MasterCard to build this enhancement. "It's not just an app," Woo says. "Because you have this embedded secure element, you need to have sophisticated technology inside the phone to make this possible. Let's say it's an app, plus plus. The secure element has to be activated, it's pretty sophisticated."