By Gareth Vaughan
The Trusted Service Manager (TSM) project being worked on by the country's major banks, telcos and payments companies that will enable mobile wallets, is on target to go live early next year, MasterCard's New Zealand country manager Albert Naffah says.
Naffah told interest.co.nz in a Double Shot interview the project was now progressing well after a lot of "good, intense negotiations" between all the stakeholders.
"It is progressing well for a launch early next year from my understanding of discussions with all those partners," Naffah, who is leaving MasterCard for a role at ASB's parent Commonwealth Bank of Australia in New York, said.
The TSM is effectively the common infrastructure to allow the secure provision of payment cards, loyalty cards and coupons to a consumer's NFC (Near Field Communication) enabled smartphone. This then lets the consumer use the phone for "contactless" credit, debit or prepaid payments via MasterCard or Visa. A mobile wallet trial has involved Paymark, which is owned by New Zealand's big four banks and leading telcos.
"For us we see this delivering significantly enhanced convenience to consumers, not just when they're paying for their purchases but across the entire purchase," Naffah said. "It's also delivering greater security to consumers and to merchants as well."
This was because mobile phones provide another layer of security given people can lock their phone.
"They can put a pin or a password on it, they can use various methods that ensure it can only be used by themselves," Naffah said. "So it's going to deliver that significantly enhanced security."
Naffah estimates that 30% to 50% of all New Zealand payments transactions will be done via a smartphone within two to three years.
"And that will be world leading because the TSM initiative in New Zealand is world leading," he said. "There is no other market in the world that has developed a TSM solution that covers all the banks, all the customers of banks and all the customers of all the mobile network operators."
"In a market like New Zealand with 4.5 million people you needed that 'co-opertition,' that combination of co-operation and competition which is what this TSM solution is and that will then deliver a fantastic service to consumers. I know kiwis are early adopters and they'll take it up and they'll be using it frequently," Naffah added.
"They'll still need that plastic (card) in their wallet for when they travel overseas or for that rare merchant in New Zealand that won't accept, or hasn't yet updated their technology."
MasterPass coming to NZ next year
Meanwhile Naffah said he was "pretty confident" MasterCard's MasterPass digital wallet, which has been launched in the United States, Canada, Australia and most recently Britain, will be introduced in New Zealand next year. There was still work to be done with retailers and banks, who MasterCard needs to distribute it through to their customers.
"If you want a real life example of what it looks like, many people are familiar with PayPal. This (MasterPass) is PayPal but even better because it is an open wallet. It will allow you to store multiple card types in there and self select those card types every time," said Naffah.
"It will allow you to store a whole number of different cards that work online via e-commerce in that wallet. Any card that works online will be able to be stored in the wallet. You'll also put a bunch of other personal information in it like your home address."
Then whenever there's a MasterPass button on an online retailer's payment page users can click the button, confirm who they are with a secure password, and then all the information required to complete a transaction will be "populated" into the payment page.
"You only enter that information into your wallet once. And forever more whenever you see that MasterPass button it will auto-complete the payment page for you in a secure way. (But) you have to authenticate yourself every time you use it online," said Naffah.
Avoiding being the next Nokia
Naffah also says the opportunities created by a digital world for "payments technology companies" like MasterCard outweigh the risks, if you understand what those opportunities are and act to take advantage of them.
"It's now so much easier for a new entrant to come into our space and to displace us and to win the affection of our customers. They'd become our former customers and we'd disappear," Naffah said.
He pointed to the example of Nokia, formerly the world's leading mobile phone maker which has been superseded by rivals after failing to appreciate the opportunity created by smartphones.
"We need to ensure that doesn't happen to us by continually investing in new technologies (and) trying to understand what consumers want," Naffah added.
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