Paymark steers NFC collaboration in New Zealand

Beverley Head
While banks and their partners in Australia grapple for a viable - and independent - model for mobile payments, the industry is taking a collaborative approach in New Zealand.

In Australia, most of the major banks are involved in Near Field Communication projects or pilots. All those currently public are standalone unilateral schemes.

Internationally, there is more of a collaborative approach being adopted - with a focus on using Trusted Service Managers (TSM) to create payment ecosystems rather than a patchwork quilt of standalone systems.

Open ecosystems of this type might, ultimately, prove the financial sector's best defence against assault from the likes of Google or Apple, with their own-branded digital wallets and, potentially, closed payment loops.

New Zealand is taking a highly collaborative tack regarding contactless payments, under the aegis of its Paymark debt-card scheme.

In April, Paymark said it had forged a joint venture with Vodafone New Zealand, 2degrees and Telecom New Zealand to launch a TSM that would support contactless mobile payments.

Phil Deason, head of products and partners for Paymark, said that, at present, the joint venture organisation was involved in vendor selection of a technology partner and looking at "about half a dozen providers" in the TSM market.

Paymark already has experience working with Gemalto's TSM, having been part of a trial in association with Telecom New Zealand, Auckland Transport, Westpac and Thales to use smartphones for contactless public transport payment earlier this year.

Deason said a decision on technology partners was expected before Christmas, with a commercial TSM launch planned for mid-2013.

Since the NZ joint venture was announced, in April, Deason said that a "very good robust set of core principles" had been developed along with a series of different business models that were being explored.

"We've only got 4.5 million people, so we've got to be smart about this," said Deason, who added that it was the joint venture's intent to be a "low cost utility provider. We're not there to make a lot of money", but to provide a payment regime in which all players can participate on an equal basis.

He said that the intent was to remain device-agnostic, and that the iPhone 5's lack of an NFC chip had not dismayed the organisation, which sees itself as the provider of plumbing for mobile contactless payments, rather than a service provider itself. In any case, there are a "lot less iPhones in New Zealand than Australia", says Deason

New Zealand will be an important test for TSM capability internationally.

"Even Australia is a dramatically bigger market. We have had the appetite to collaborate, and, to me, that's the main thing," said Deason.

(For background on the fragmented approach to crafting Trusted Service Managers in Australia see this article from last week).