Banks and mobile phone companies should decide by the end of the year whether to press ahead with a joint venture that would make it easy for people to pay for goods using their mobiles, says eftpos operator Paymark.

The project was complex but the parties had not been discouraged by the collapse of a similar venture in Holland earlier this month, said Paymark head of product and partners Phil Deason.

Bank-owned Paymark, Vodafone, Telecom and 2degrees announced in April that they would join forces to build near-field communications (NFC) technology into new smartphones. That would let eftpos users pay for goods in shops using their mobiles in the same way that they can using Snapper and contactless credit cards.

As well as being more convenient for phone-lovers, the technology could improve security, as the payment function could be remotely disabled if a phone was reported lost or stolen.

Retailers could send vouchers to phones that could be redeemed at the checkout and eftpos receipts could be issued electronically to phones, rather than printed out.

Deason said the group had decided to complete a business case before deciding whether to form a joint venture, probably ''early in the new year''.

A similar joint venture, dubbed ''Sixpack'', between Vodafone, KPN and Dutch banks was canned on July 17. The group had planned to implement NFC technology in a secure part of phone users' Sim cards but said the project had proved too complex and costly.

Deason said Paymark had been keeping a close eye on Sixpack but he believed there were other issues involved. ''We have spoken to some of their guys. They had some concerns around the regulatory aspects.''  

In a more positive development, The Financial Times reported an NFC alliance between banks and telcos in Britain was likely to get the thumbs-up from regulators.

Collaboration would be important in New Zealand because it had the complexity and sophistication of a large market, but without the scale, Deason said. ''As a result of that we have got to be smart and we have got quite a good history of co-operation.   

''Our intent is to provide low-cost, ubiquitous access to consumer mobile devices, so any organisation that wants to put something on them, whether it is a bank or a transport operator, can compete.''

The group knew the order of magnitude of the cost, but the demand for NFC payments was still quite uncertain, Deason said. ''I think we have got to go into it being realistic that it is quite unlikely to make money for while.''

- © Fairfax NZ News