ASB'S new online pay system is wheeled out
A new alternative to using credit cards to shop online could become the next leap forward in New Zealand's rapidly evolving payments landscape.
But experts are divided on whether ASB's PayHere is destined to become a force for change - or a fragmented flop.
Almost 250,000 of the bank's customers will get their first look at the new payment system when it rolls into the updated mobile app on Tuesday.
PayHere aims to remove the hassle of having to enter a credit card number, name, expiry date and security code when shopping online.
Instead, customers can type in their mobile number and then authorise the payment from their transaction account in real-time, through the ASB app.
Banks have started competing fiercely with new payments apps and innovations, and ASB claims to have been at the front of the pack.
"Payments is really core to what a bank does," says ASB chief operating officer Russell Jones.
He says ASB has invested heavily in back-end systems in recent years, as well as pioneering payments between TradeMe users, to email and mobile contacts, and even Facebook friends.
PayHere's make-or-break factor will be how enthusiastically it is adopted not just by consumers - but retailers.
Jones says the bank is currently working with payment gateways DPS and Paystation to embed the functionality, as well as directly with merchants.
"What we're really trying to do is get the convenience of Eftpos and the comfort and trust that people have in the Eftpos system, and make that available online," he says.
While you'd think retailers would leap at the chance to make it easier to separate shoppers from their money, Tim Morris isn't so sure.
The Coriolis Research director and retail analyst says the new app looks like "innovation chasing a problem".
"There is [already] a solution in place," he says. "If you look at the history of innovation, slightly better doesn't get you anywhere."
While Jones is hoping to mirror the success of Eftpos, the difference is that the hugely popular payments system was a joint effort between all the major banks.
"The retailer - be they online, be they bricks-and-mortar - don't want to support five banks . . . they just want a simple solution," says Morris.
And he says the app's narrow target audience is really only those without a credit or debit card, who shop at participating local websites, and also happen to be ASB customers.
"Oxygen's going to get pretty thin when you shake all of that out."
But Creative HQ chief executive Stefan Korn, an e-commerce expert, thinks the bank is on the right track.
While not many people have their credit card details memorised, practically everyone knows their mobile number, he says.
That's significant because online businesses lose as much as 30 per cent of sales through failure to offer a painless payment option.
"That's actually the most annoying segment of potential customers that you're losing at that point, because internally they've already made the purchasing decision," says Korn.
He says retailers have no excuse for refusing to accept a broad range of payment options:
"As a retailer, you should be on all shelves, and you should allow all avenues of payment."
Korn says the speed of uptake for new technologies - payments or otherwise - has become increasingly rapid over time.
"As soon as highly usable, convenient and secure, in this case, technology becomes available, adoption is really, really quick."
Eftpos accelerated much faster than credit cards, for example, and was in turn eclipsed by internet banking and most recently, mobile banking.
ASB has already reached the tipping point where more than half of its sessions are on a mobile device, and Jones says it will inevitably become the dominant payments platform.
Korn doesn't know what the payments industry's final solution will look like, but he knows where it will be found.
"It has to be mobile-based, whatever way you look at it," he says.
"The mobile is becoming the ubiquitous and ultimate device - for everything."
Sunday Star Times