Facebook banking has arrived in New Zealand with ASB allowing customers to make payments to their "friends" - regardless of whether they know their account number.

Only ASB customers can make payments through the social networking site, but anyone with any New Zealand bank can receive them.

People with other banks cannot make payments, only accept them.

The feature, launched yesterday, is an enhancement of the existing ASB Mobile app, which lets customers pay phone and email contacts, as well as manage their accounts, with the same system.

Users choose which "friend" they want to make the payment to, how much and what it's for.

The friend then gets a notification on Facebook that they have a payment to collect.

They click the notification, which then asks them to install the Social Collect app.

Once they have done that they can see that there's a payment waiting for them.

The money is then sent to their nominated bank account.

Account details of the person either making the payment or receiving it are never handed over to Facebook.

Bank spokeswoman Anna Curzon said payments through Facebook were the next logical step.

"More than two million New Zealanders are on Facebook, and many of them manage their lives through social media channels."

Ms Curzon said the online payments were another step towards a cashless society in New Zealand.

"Mobile and online banking innovations mean customers no longer need to rely on the traditional wallet.

"They can instead use 'the bank in their hand', giving them greater control over how they mange their money."

ASB has assured customers that security is "always a top priority".

It uses the latest encryption technology to minimise security threats such as malware and hacking. All un-retrieved funds are credited to the payer after 14 days.

The app is available on Apple and Android platforms.

HOW IT WORKS

* ASB customers download the ASB app to their phone.

* They select which 'friend' they want to pay, and how much.

* It doesn't matter which bank the friend uses.

* The friend is notified they have a payment waiting.

* The friend downloads the Social Collect App and can then collect the payment.

By Amelia Wade Email Amelia