PayTag use on rise as ASB joins trend

A sticker attached to a cellphone allows payments to be made without carrying a wallet or purse.

A second major bank is offering "contactless" pay technology.

ASB has joined Westpac in offering the new PayTag service, which involves stickers attached to smartphones to speed up payments. The sticker has a chip that when held near a contactless-enabled Eftpos terminal prompts the terminal to signal that payment has been made and the transaction approved.

ASB payments general manager Matt Bartlett said the bank had distributed about 10,000 stickers since the launch on November 17. ASB integrated the PayTag with an existing mobile phone banking app.

Apart from an $80 limit on payments without PINs, it had another security feature.

"What you can do as a customer is turn the tag off and turn it on when you want to use it at the time of transaction," Mr Bartlett said.

He said New Zealand was up to 18 months behind Australia in adopting PayTag technology. In Sydney alone, at least 30,000 retailers and businesses now accepted contactless payments.

"The key to driving up volumes in New Zealand will be increasing acceptance levels amongst retailers. Less than 20 per cent of terminals accept contactless [payment] but with larger retailing chains coming on stream, customer ability to 'tap and go' will increase markedly over the next couple of years."

Mr Bartlett said the technology would "complement" other payment methods and was not expected to affect branches or staff numbers.

The bank was also investigating ways public transport users could use PayTag on buses or trains.

Westpac began PayTag this year as "a companion" to existing MasterCard accounts.

Netsafe chief Martin Cocker said PayTag had some security risks but banks were usually good about reimbursing defrauded customers.

Kevin Murphy, TSB Bank managing director and chief executive, said TSB did not have a PayTag option at the moment but did not rule it out.

ANZ Bank did not have plans to introduce "tag" technology but was exploring other technologies.