NZ to lead world in paying by phone
‘‘NEW ZEALAND will lead the world in payments again,’’ says MasterCard’s New Zealand country manager Albert Naffah.
Around the world there is a rush to make payments faster and easier, and the smartphone is the device everyone is focusing on.
But in only one country in the world have all the major banks and mobile telecommunications companies agreed to a joint venture to develop a technology platform to enable the likes of MasterCard and Visa cards to be virtualised and, in effect, implanted into smartphones.
When eftpos was created by a consortium of banks agreeing to work together, it was a world first.
It led to a revolution in easy payments, a revolution that has been wonderfully durable despite the best efforts of credit card companies such as MasterCard to grow their payments market share in traditional retail situations.
Something similar is happening again.
The bank-owned Paymark is embarking on that endeavour with Telecom, Vodafone and 2degrees.
Naffah said it will establish a single data-exchange technology platform to enable payments to be made by bumping smartphones against smart devices in places like shops, petrol stations and transport systems.
The joint venture is to create what is being called a TSM, or trusted service provider, which will be a neutral intermediary which will sit between the banks and the mobile telecomms company to securely pass personalised data, for example a person’s credit card details, from their bank and on to their mobile phone without the telecomms company being able to see it.
Once that credit card information has been passed, the smartphone will have the functionality of that card (minus the ability to swipe it, dip it or zipzap it) and the TSM will play no part in relaying data for individual transactions.
Over the past couple of years ‘‘tap and go’’ style debit and credit cards have emerged which use ‘‘near-field’’ technology that allows users to tap their card on a smart payment terminal in the likes of a petrol station or shop to make small payments without the need to enter a Pin.
The chips needed to do that are increasingly being built into mobile phones, and the terminals are spreading rapidly.
MasterCard has several thousand such smart terminals already deployed around the country including at Bunnings, Kmart, The Warehouse, Resene, Repco, and BP, with more to be added in the coming months.
It’s early days, but Naffah foresees a future, and not a distant one, where it is not only credit and debit cards that migrate on to smartphones, but other inhabitants of the nation’s wallets such as gift cards and store loyalty cards.
Access cards for workplaces could go on smartphones.
When you check into a hotel, instead of giving you a keycard, your phone could be turned into a temporary keycard to open the door to your room.
Each person using their smartphone in this way will have a virtual mobile wallet, similar to the Google Wallet.
The plan is for a New Zealandonly wallet format to be set up.
A trial by Westpac, which can be
viewed on its website, provides an indication of what will be possible, with people able to use their smartphones to make payments in places like cafes and at railway stations.
There will also be greater scope for people to make personal decisions about the way they transact.
At the moment tap-and-go-style payments are only for low-value transactions, Naffah said.
The limit is $80, after which a Pin has to be entered.
It’s a safety feature so if your card falls into the wrong hands it can’t be used to buy expensive items a thief could sell on for cash.
But Naffah said once cards go mobile, people will be able to set the Pin-free level where they see fit.
They may decide to set it at the level necessary to fill their tank full of petrol to reduce the time they spend filling up, or they might set it to the cost of their weekly shop.
Others, who spend more and judge the risk of their phone falling into the hands of criminal as being low, might opt for a much higher, but more convenient, Pin-free level.
Nobody can predict the future accurately, but in 15 years’ time, the sight of credit cards being pulled out at terminals may be rare. Whether they will have left people’s wallets entirely is a different matter.