New money

Snapper CEO Miki Szikszai.
Snapper CEO Miki Szikszai.

When Snapper swims through troubled waters, CEO Miki Szikszai thinks of his parents. 

His Polish mother was orphaned as a young child during World War II when both her parents were shot. She then came to live in a refugee camp in Pahiatua. Szikszai’s father fled to New Zealand after the hostilities of the 1956 Hungarian Revolution.

“I just have to remember that nothing can be as tough as what my parents and their families went through,” Szikszai says.

Even when the Wellington-based contactless payment company was ousted from Auckland Transport’s controversial integrated ticketing system last August, Szikszai refused to let it dent Snapper’s enthusiasm.

“Yes, it’s frustrating, but you just have to get on with it. We have a great team, a great product, and we can’t afford to loll around,” he says. 

In the wake of the very public ditching, Snapper is heading offshore. 

The Infratil subsidiary, which has grown in revenue by nearly 300% since it launched in 2008, is taking its cards and revolutionary mobile phone app to Southeast Asia and offering its technology to Apple.

The company prides itself on its world leading mobile phone payment technology and eliminating the need for loose change in pockets. 

When Szikszai takes the bus to work from Eastbourne to downtown Wellington, he is constantly watching the passengers. 

With more than 425,000 Snapper cards in use in the capital and Auckland, most of the passengers on his bus route use the tag on, tag off system. 

Around 80% of Wellington bus users touch the company’s Snapper cards or mobile phones to the validators to pay fares.

“It’s still one of those genuine ‘wow’ moments when you watch it being used,” Szikszai says. “We don’t see it as technology, but more as a new way, because we’re trying to make things as easy as possible.”

The “new way” has spread beyond bus tickets to taxi fares, convenience stores, school tuck shops, cafes and movie theatres. 

Snapper’s focus is on cash replacement. “Our sweet spot is any payment less than $20,” says Szikszai. 

Jack’s Bakery, on the Basin Reserve roundabout, serves four schools in its daily clientele. 

Owner Jack Looc, who has a network of bakeries throughout Wellington, says 60% of his business is done through Snapper, especially around the school lunch rush hour.

“Snapper is a really great thing, for me and for my customers. A lot of them are students, but some are people who grab something to eat while they’re waiting for a bus. They don’t have to hand over cash, so they are happy,” Looc says. “And I’m happy too; it has made a big difference to my business.

 “Who picks up the technology first? The kids,” Szikszai says. “We hear of parents putting $30 on their kids’ cards for the week to cover their bus fares and their lunches.” 

Next in line for the Snapper treatment are parking meters and Wellington rail.

Snapper cards are still in use on NZ Bus vehicles in Auckland, but that arrangement is about to reach the end of the line.

After its success in Wellington, Snapper’s smart cards were adopted on buses in mid-2011 while Auckland Transport worked on phasing in an integrated ticketing system across buses, ferries and trains with Snapper’s French rival, Thales. “Then things got difficult,” Szikszai says. 

Snapper was prepared to make its cards compatible with the wider Hop card scheme — rolled out on rail and ferries late last year — but needed specifications of the new system to plug in its technology. 

“[Auckland Transport] said, ‘you need to deliver by this date’, but we said unless they told us what was needed, it was hard for us to meet the deadline. That turned into them terminating the contract and led to us seeking to recover our costs.”

Auckland Transport declined to comment on the issue, bound by “confidentiality obligations”.

But at the time of the termination, chief executive David Warburton said the decision was made “in the interests of protecting Aucklanders’ money and progressing the essential outcome of a first class integrated ticketing programme” when it appeared Snapper would not meet the deadline to comply with Thales’ equipment.

He said a settlement with Snapper would have cost Auckland’s ratepayers and taxpayers up to $8 million “which we were not prepared to concede”. 

The 200,000 Snapper cards in circulation in Auckland will not be redundant, Szikszai says, with 200 retailers and over 1000 taxis in the city accepting payment through the card.  Szikszai said the break up with Auckland Transport was “frustrating on a number of levels”. 

“From a New Zealand Inc perspective, we’re a Kiwi company doing really interesting things. We’re really proud of what we’re doing in the Wellington market at no cost to the ratepayer or taxpayer,” he says.

“But since the situation came about, we haven’t seen any slow down in uptake or in growth. The person on the street wants a product that works, that’s simple to understand and easy to use.”

Snapper won the 2012 Deloitte Fast 50 Fastest Growing Technology Business award for the lower North Island, and the company is forecasting around 60 million Snapper transactions this year. 

As far as Szikszai is concerned, there are bigger fish to fry. 

By April, every parking meter in Wellington city will be fitted with Snapper technology so the card and phone app can be used to pay for parking. 

Snapper is talking with the Greater Wellington Regional Council about using its system on the city’s trains. Christchurch, Tauranga and Hamilton are also on the list for future Snapper transactions.  

And there’s the development of contactless payment using mobile smartphones. Snapper has worked with 2Degrees to take advantage of near field communication (NFC) technology on new generation smartphones like the Samsung Galaxy SIII. 

More than 4000 New Zealanders have downloaded the free Snapper app.

The Touch2Pay system means you can pay by pressing your mobile to a reader without having to enter a pin or touch a screen. Snapper claims the transaction is three times faster than Eftpos and six times faster than a credit card. 

Szikszai brought his knowledge of mobile technology to Snapper from 14 years with Telecom, where he ran cellular development. 

“We wanted to answer the question of how to remove another card from your wallet. Now you don’t have to worry about a wallet,” he says. 

The app is a first in New Zealand and one of the first of its kind in the world (South Korea has an NFC transit payment system on buses, subway trains and taxis). Earlier this year the app was up for a Technology of the Year gong at the Mastercard Transport Ticketing Awards. 

“We’re the only commercially launched system in the world doing retail, public transport and taxi fares with a full mobile integration. That’s cool,” Szikszai says. 

Snapper wants to capitalise on public transport systems, particularly in Asia, that have yet to “mobilise” fare payments. Octopus, one of the world’s largest smart card payment systems in Hong Kong and China, told Szikszai it was two years behind the Kiwi company in developing a mobile payment scheme. 

“We are telling others around the world what we can do and we think there’s a really obvious solution where we can build a product to attach to those schemes to ‘mobilise’ them. We don’t want to be in competition with them,” Szikszai says. Snapper is in discussions with a number of Southeast Asian companies.

Snapper has also approached Apple with its app, but the giant has yet to incorporate NFC technology into its phones. “These phones have done incredibly well in New Zealand and we hope it appeals to Apple’s design and business sense. They will get on board eventually, they have to,” he says. 

For a company moving so fast through uncharted waters, there have been glitches. 

Three years ago, a card glitch meant overcharged fares for 2000 Wellington commuters. In “a moment of truth” for Snapper, it tracked down the cardholders and paid them back.  The system it used became a building block for the mobile technology. 

“A few years ago, we were little Wellington at the bottom of the world,” says Szikszai.

 “In the last year, we’ve been showing people what we are doing with mobile and it’s jaw dropping stuff. The most gratifying feeling is seeing people using it.”

Disclosure: Suzanne McFadden travelled to Wellington to interview Snapper, courtesy of the company.