After ten years of bluster, the smartcard revolution is finally about to dawn and Wellingtonians are first in line to benefit.
From June, people will be able to pay for bus tickets and everyday items in shops using the Snapper card, a stored-value smartcard that NZX-listed infrastructure investor Infratil hopes will become more widely used than conventional eftpos cards.
Infratil has set up a subsidiary, Snapper Services, to market the cards, which will act as an electronic purse that can be topped up over the Internet or in shops.
Snapper Services has teamed up with ANZ National Bank to ensure Snapper cards can be used as eftpos cards.
To accept Snapper, retailers would need an eftpos terminal with a contactless card reader. Peter McLeod, managing director of ANZ National subsidiary Eftpos New Zealand, says these readers cost about $200, but they will probably be leased with eftpos terminals and will soon be standard equipment.
Snapper Services general manager Charles Monheim says Snapper is the "natural successor" to eftpos for low value transactions.
"Not only will it be used for small value purchases, parking and public transport, but it is our expectation it will be used in various ways for access control and loyalty schemes.
"The first roll-out will be to a significant number of merchants in Wellington. We are doing those deals now."
Bus passengers will be given a 20 per cent discount over cash if they use Snapper, which is being trialled on one Karori bus. With no need for a Pin, transactions can be completed in a fifth of a second.
Mr Monheim says Snapper is similar in concept to London's Oyster cards and the Octopus card in Hong Kong. "Snapper" was chosen as the brand to continue the nautical theme.
Before joining Snapper, Mr Monheim was director of the 1.2 billion Oyster scheme. Oyster cards are now used to pay for more than 36 million journeys a week.
"We are trying to do something similar here on a national scale. And Wellington is the place we are starting because one of the first organisations using it will be NZ Bus.
"But in a country like New Zealand, that does not have high use of public transport, you can't develop one of these schemes in the same way as you would in London, Hong Kong or Seoul, where the public transport network means everyone will have a card.
"Therefore our strategy has been to view this at the very beginning as a broader small value payments scheme."
Consumers will have to buy Snapper cards but will not be charged eftpos fees. Transaction charges will instead be picked up by retailers.
Cardholders will be able to top up Snapper cards by credit card over the Internet by clipping their card to a USB device that plugs into a computer.
The USB chargers will be sold separately. Snapper will also be available in the form of a USB stick, that can be plugged directly into a computer and topped up.
The cards and readers are being sourced from Korea, but much of the intelligence behind Snapper was developed in New Zealand by Petone-based online database pioneer Eyede.
Mr Monheim says Snapper selected Eyede because of its know-how and "customer service focus".
In October, Eyede recruited former NZ Post head of payments Paul Kennedy as its chief executive.
Eyede co-founder Wayne Stemp says Snapper is a "major change, potentially to the infrastructure of New Zealand, because micropayments might finally be here".
Snapper cards could be used in the future to make purchases over the Internet or to transfer money between cardholders, he says.
Infratil, ANZ National Bank, NZ Post, Eyede, Unisys and Beca Group are pitching Snapper to the Auckland Regional Transport Authority, which has let a contract for a smartcard system for use on public transport in Auckland.
- © Fairfax NZ News