BNZ to offer Apple Pay, but retailers may still favour eftpos
New Zealand's fondness for eftpos may hinder the adoption of Apple Pay and other new payment technology.
BNZ has revealed it will join ANZ in offering Apple Pay, which allows users to make cashless credit card transactions with their Apple devices.
It relies on retailers offering the technology to accept the payments. Android Pay and Samsung Pay are similar systems offered for Apple's competitors' devices.
BNZ director of products and technology David Bullock said the development had been prompted by customer feedback. He expected high demand. "More and more retailers are accepting it. There's a fairly high acceptance rate in New Zealand."
He said it should be simple for customers to set up.
Technology commentator Paul Spain said there seemed to be growing interest in the offer. "You see the Apple Pay logo turning up on things more and more," he said.
"That said, it's still not that widely adopted ... it's a very niche capability at the moment."
He said he had used Apple Pay in a shop recently and the teller had not seen it before.
That should change as more people became used to doing more on their smartphones and the tap-to-pay capability because more widespread in shops, he said.
"But there's a real limitation in New Zealand because we've heavily adopted eftpos and it works so well and works so well for retailers."
Retailers might not want to make the shift to Apple Pay and other contactless credit card payment technology easy, he said, because it would come at a higher cost to them than accepting eftpos cards.
Shop do not pay a commission for accepting eftpos payments. By contrast, credit card payments can cost retailers about 1.7 per cent of the total to accept, contact debit cards 1 per cent.
RetailNZ spokesman Greg Harford said his organisation often heard of people paying 3.5 per cent. "The highest we've heard of is 5.5 per cent. The 1.7 per cent average compares to 0.89 per cent in the UK and 0.78 per cent in Australia, so New Zealand merchants - and consumers - pay substantially more to use credit cards here than in those other markets."
If more retailers refused to take credit card payments of less than a set amount, because of those fees, that would mean shoppers had to continue to carry their eftpos cards, reducing the appeal of smartphone payments, he said.
BNZ has not set a firm launch date but it is expected later in the month.