Westpac says it has become the first bank in New Zealand - and one of only a handful around the world - to begin trialling a Host Card Emulation mobile payment system that is expected to be launched early next year.

Forty Westpac staff and customers are involved in the three month trial of the technology, which will enable users to make payments with near field communication (NFC) enabled Android devices. Apple iPhones do not support NFC at present.

The bank said the Host Card Emulation (HCE) system, provided by Canadian digital payments systems developer Carta Worldwide, allowed credit card and debit card details to be securely stored in a cloud - online - environment, accessible on smartphones after a four-digit pin code has been entered.

"This places all relevant customer information in one place without the need to carry and use a physical credit or debit card," Westpac said. "After downloading a digital wallet app and registering their card details, customers will be able to use near field communication enabled Android handsets to make payments at any contactless terminal."


Around 18,000 of terminals are currently installed in a range of New Zealand businesses.

Westpac chief product officer Shane Howell said banking was going through a period of "massive digital disruption".

"The first port of call where this disruption will occur is in payments," Howell said. "We already use our smartphones to organise so many aspects of our lives, so using them to make payments is just a natural extension of this."

He said the smartphone technology was one of four components Westpac was looking to develop to make up a "digital wallet" for customers.

"The other components we are looking to incorporate are transport cards for buses and trains, loyalty programmes such as Hotpoints and potentially even forms of ID like a driver's license," Howell said. "What we're working towards is a true digital wallet experience that is safe and easy to use."

TSM NZ - a company established by Eftpos operator Paymark (which is owned by ASB, Westpac, ANZ and BNZ) and telcos 2degrees, Telecom and Vodafone - is working to develop technology that will allow New Zealanders to use smartphones for a range of functions, including payments, collecting loyalty points and public transport.

Howell said mobile payment technology was developing rapidly and taking an independent route through using HCE would "ensure flexibility".

"Working within an industry wide group such as the TSM ... may not allow that flexibility," he said.