Marsh said it would allow payments to be made using either a mobile number or QR code that could be scanned at the counter of a merchant or on their bill - allowing parties at a restaurant to split their bill and make separate payments.
Users, who must be over 13 years of age, can make payments of up to $500 and store up to $1000 in their wallet.
The system also allows people to request payment from another user allowing a tradesperson to instantly attach and send an invoice for work they have just done.
Users don't get charged to transfer money within Dosh, only when they move money back into their bank account when they will be charged 1 per cent of the funds transferred.
Marsh said it expected the take-up to be strong among social groups of friends or flatmates and it was also targeting small businesses who might be struggling to provide contactless payment in the current lockdown.
Marsh said businesses were really challenged by being in level 3 lockdown conditions because they needed to receive payments but may not have a contactless payments terminal.
"I see a lot of people are putting up notes on their shop windows with their bank account details and asking people to send them photos of the transactions but with Dosh you can use your business QR code and have that on the company website or invoice or counter and people can just scan it and pay it.
"While there might be less activity from people going out to restaurants together we think there is a real need and real need from small businesses who need to receive payments."
Businesses can also pay a monthly subscription to make discounts and deal offers through Dosh.
Initially it hopes to target cafe owners and independent businesses and then build up to bigger retailers.
"Where Dosh can really fill a gap in the marketplace is really with those small SMEs who are standalone independent and don't have standalone sophisticated payment options today. That will be our focus."
They had also hoped to target events for the digital wallet but Covid has thrown a curveball in that area.
"We had events lined up as well with event organisers over summer but a lot of those have been put on hold or decisions to run these events are still pending given news that is changing around the ability for operators.
"Unfortunately, we have had two operators postpone large summer events for another year. That has put that plan on hold a little bit."
They plan to start the service with just payments but expand it over time, to add additional services like micro-investing, insurance services and buy now pay later.
"Our objective is to be a leading financial services provider in New Zealand so the offering will expand much beyond payments."
It would start looking at those additional services from next year once its customers numbers had built up.
"With buy now pay later there is clearly a demand for alternative credit or lending services - we will look at that as a potential option and will talk to our customer base about what it is they want to see and what do they most want to be digitised. We will be having those conversations with users."
The pair aren't the only ones targeting the digital payment space.
Red Bird Ventures which is owned by Westpac bank announced in August it was close to finalising an app called Buck which will also enable person to person payment.
Marsh said Buck would be another Australian-owned financial solution in the New Zealand market.
"They are quite different - Dosh is a digital wallet and you have an account and relationship with Dosh and we will provide payment services and new services as we develop further.
"Buck is a payments app and sits on top of existing banking system and it provides a communication layer."
He said the difference was that Dosh was looking to create a new banking system that was instant.
The pair are also seeing investor interest in their company. They have already raised a $1 million in a pre-seed raising and will undertake a further seed capital raise later this year potentially targeting between $3m and $5m.
"We have had a lot of investor interest particularly from those who have lived overseas and used similar apps there."
