Telcos join forces for mobile payment push

Vodafone, Telecom, 2degrees and Telecom have joined with Paymark to launch a 'mobile wallet' joint venture to allow people to pay for goods and services with cellphones. Photo / Thinkstock

Paymark, Vodafone New Zealand, 2degrees and Telecom have joined forces to allow New Zealanders to buy goods over the counter, collect loyalty points and pay for public transport with their mobile phones.

The companies announced this morning that they will form a joint venture and launch a trusted service manager (TSM) for "mobile wallet" services.

This initiative will create the infrastructure necessary to enable many of the cards held in a wallet today to be replaced by applications securely stored in a virtual wallet on a mobile phone, the companies said in a statement.

The "mobile wallet" system works by using a near-field communication (NFC) chip inside a smartphone.

NFC is technology that allows information to pass from one device to another when they are close to each other.

It is regarded as safer than Bluetooth for transferring personal data as it has a much shorter range, reducing the risk of information spilling into the wrong hands.

Mobile wallet services were launched in North America and the United Kingdom this year and have been operational in Japan since 2004 and South Korea since 2007.

Vodafone flagged their plans for it in July last year, and began testing the techonology in two cafes in November.

While some Android smartphones - such as the Samsung Nexus S - have an NFC chip installed, the iPhone does not.

Apple is expected to include an NFC chip in the next generation of iPhone it releases.

Paymark chief executive Simon Tong says the collaboration will aim to create "an open ecosystem" that will help encourage wide-spread consumer uptake and avoid customer confusion.

While the technology is being tested, it is not expected to be rolled out commercially until next year.