Westpac whips out digital wallet early
New Zealand's top mobile payments boss is disappointed Westpac has jumped the gun with its own "digital wallet", but hopes it will return to the fold.
The bank has announced a trial of a smartphone app for making contactless payments, using Android smartphones with near-field communication (NFC) technology.
Forty customers and staff will test it over the next three months, with a full rollout scheduled for early next year.
Westpac has bypassed the trusted service manager (TSM) for mobile payments, a joint venture set up between bank-owned eftpos operator Paymark, and telcos Vodafone, Telecom and 2degrees.
The bank's decision to go it alone means it will no longer be participating in the initial release of TSM's white-label wallet.
TSM NZ chief executive Rob Ellis said the brand would be unveiled in coming months, with a public release before the end of the year.
"While we're disappointed that Westpac aren't going to be there for launch with us, we continue to engage with them and hope to see their services in the TSM wallet in future," he said.
Westpac has chosen to use a new cloud-based technology called host card emulation (HCE), which was not even in market when the TSM was formed.
HCE stores customer details remotely using software, compared to the more established method of encrypting details as a "secure element" on a physical sim card.
Ellis said TSM was technology agnostic, and would watch HCE trials with great interest.
"We're actively assessing HCE ourselves, and considering how and when we would bring that into the mix," he said.
"We're launching with what we believe is the most appropriate technology for New Zealand at this time."
Westpac chief product officer Shane Howell said the bank would no longer be dependent on mobile network operators or handset providers.
While working within the TSM might not allow as much flexibility, "that's not to say we will never be part of the TSM", he said.
Westpac also plans to incorporate bus and train cards, loyalty cards, and potentially even ID such as a driver's licence into its wallet.
Howell said the bank was already in talks with third parties, but would not name them.
Customers would still have to key in a Pin number before transactions went through, he said.
"This is just as secure as a physical card that exists today."
Future ways to make payments easier could involve a fingerprint scan or voice biometrics, he said.
He was comfortable that HCE would become the "end state" for mobile payments, Howell said.
However, several other technologies are in development.
Apple is especially likely to be a game changer, as it has repeatedly surprised pundits by failing to include NFC in the latest iterations of its iPhone.
ASB is also backing NFC, but hedging its bets by developing several solutions at once.
Both ASB and Westpac are publicly launching PayTag stickers later this year, a workaround which gets around the problem by adhering to the back of non-NFC phones.
BNZ, Vodafone and Visa also have their own digital wallet trial under way, called SmartPass.
- The Dominion Post