From cash to card to digital and beyond, the power of converging technologies in the payment space is transforming how people transact. While cash is still the most widely used payment mode around the globe, it is fast becoming outdated, and as one of the first countries to move away from cash with EFTPOS in 1985, New Zealand is well positioned to embrace the newest evolution in payment methods.
So how is technology converging and what are the implications of this for consumers and businesses?
By now, most people are aware of 'tap and go' or 'near-field communications' (NFC) technology, and the success that the industry has had with it. Being able to simply tap your credit card on a terminal and make purchases more swiftly and efficiently, is now a standard feature of the payments landscape. This however, is merely the latest evolution of digital convergence when it comes to payments — and the next progression is just around the corner.
Making payments with your mobile phone has long been touted as the next big thing and New Zealand is unique in that it is the first example worldwide, where all of the main players from across the banking and telecommunications industries have come together in order to build a shared mobile wallet solution that will be able to be accessed by all, through the formation of a trusted service provider (TSM).
For New Zealanders, this means that irrespective of what major bank or mobile phone company they subscribe to, they will be able to utilise mobile wallet technology in the very near future as the industry moves beyond the trial phase to a more mainstream roll-out in 2014. As an industry, the foundations for this technology have been laid for the past several years with several thousand active terminals already in place. This means that when mobile wallet technologies are rolled out in the near future, New Zealand consumers will be able to be amongst the first in the world to take advantage of the benefits of digital wallet technology.
In terms of the benefits, these have the potential to be far reaching from both a business and consumer perspective. The platform will support customer-specific offers, loyalty incentives, and bill-pay options. These platforms are also intended to support services beyond payments such as loyalty cards or transport cards — to be replaced by applications securely stored in a virtual wallet on a mobile phone. They will also allow retailers to create new and exciting customer shopping experiences across their channels.
To achieve this however, education will be key. As with anything in payments, security and trust is critical and it will be vital that everyone understands how the technology works and how it will benefit them.
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