New Zealanders are keen to use their mobile devices to make payments but are still in the dark about how the technology works, according a Mastercard survey.
Research results showed Kiwis were unfamiliar with mobile payments, with New Zealand ranking 17th out of 34 countries in the MasterCard Mobile Payments Readiness Index (MPRI).
There were two ways of making payments using a mobile device, said MasterCard NZ country manager Albert Naffah.
The first had been around for a long time and involved using a mobile device to access the internet to make payments, he said.
"That's still relatively low from phone devices though.
"The main reason is the screens are small and fiddly and it's just not that easy, particularly if a business hasn't optimised its website for mobile devices."
An emerging and less well-known method involved making payments through Near Field Communication (NFC), a form of contactless communication between devices like smartphones or tablets to make payments.
Users could wave their smartphone over an NFC compatible device to make payments.
"NFC is quick, efficient and is easier than pulling plastic out of your wallet every time you make a payment," Naffah said.
New Zealand had the right emerging infrastructure to make mobile payments methods widely accepted, he said.
"But the fact that willingness to adopt is high and familiarity is low signifies that more consumer education is necessary before we see broad acceptance."
Banks, retailers and telecommunication companies needed to cooperate in communicating the benefits that mobile payments offered, he said.
"This will help drive familiarity levels up and increase the readiness for mobile payments products in New Zealand."
Naffah said the recent TSM NZ Joint Venture announcement was an exciting collaboration and an example of the fast moving mobile payments environment.
"The challenge to the industry is to replicate the Australian experience where there are already 75,000 contactless terminals in the market."
In comparison, New Zealand currently had only a few hundred terminals, but Naffah expected that to be in the thousands before long.
We were likely to see the roll out of mobile NFC infrastructure early next year from the joint venture.
Naffah said people would start hearing more about 'digital wallets', which enable consumers to store their different card details online, in a cloud storage system, and then access the 'wallet' to make payments.
"This will be a whole lot quicker. It will be a contactless exchange which happens in nano-seconds."
He added that the technology will be as secure, if not more so, than chip cards.
The MasterCard Index examined consumer responses across the three different payment types; person-to-person, mobile web commerce and mobile contactless payments at the point of sale.
New Zealand scored 32.7, below the index average of 33.2, on a scale of zero to 100.
No market reached a score of 50, indicating there was still work to be done before mobile payments became mainstream.
MasterCard carried out its research between October 2011 and February 2012.