At a launch event held last night at Auckland's Snapdragon Bar, TSM NZ chief executive Rob Ellis unveiled a new mobile wallet brand, bringing fruition to a plan that was first announced over a year ago.
As part of the launch, Ellis also said that the collaboration between the shareholders 2degrees, Spark, Vodafone, Paymark and banking partners ASB and BNZ would no longer be known as the TSM but rather as Semble.
To reflect this change, Semble commissioned BRR to develop the new branding, which has been reflected the organisation's revamped website. In addition, Semble also brought in Chris Sisarich to shoot a brand video and create stills to be used in branded material, and Blend Media created a demo video that showcases the service.
Semble has also entered into a marketing partnership with Samsung, which will support the initial launch and rollout of the system.
The main principle underpinning the Semble system is that it aims to remove the need for cards by facilitating a contactless payment system through the user's mobile phone.
"It makes sense to move the physical contents of our wallets to our smartphones," says Ellis in a release. "Initially customers will be able to pay via their smartphone for goods and services but Semble will ultimately eliminate the need to carry any cards at all.”
Initially, the Semble mobile wallet will only include the ASB, BNZ and some Air New Zealand Airpoints-earning GlobalPlus cards, but there are plans to extend it to include additional bank cards, loyalty cards and public transport cards in the future.
"Soon smartphone users will be able to purchase goods and services via their smartphones and know instantly whether they’re due that free coffee or voucher without rifling through their collection of loyalty cards amassed over the years,” says Ellis.
The service will only be available on smartphones that have near field communication (NFC) capabilities, which allow for short-range wireless communications between two electronic devices.
According to Semble's research, it is expected that approximately one million NFC-enabled smartphones will be used in New Zealand by the end of 2014, meaning that Semble system could potentially be used by a large chunk of the Kiwi population.
As is the case with any form of electronic payment, Semble has placed significant emphasis on security to ensure that user data isn't compromised. Semble will store personal information encrypted on a 'secure element' contained within the SIM card (similarly to chips used on credit cards), there will also be additional layers of security available via a security code for the mobile wallet app and the pin code or biometric security on the phone.
While the service has now been launched officially, a live marketing pilot will only start in November and the app will be available to download from Google Play early next year.
But Semble isn't the only organisation that is currently dabbling in mobile payment technology. Last week, StopPress wrote a story on what the various players are doing, and it seems that this space is becoming quite competitive.
Previous article published on 2 October: 'EFTPOS NZ and Paymark face competition as Spark and the big banks dabble in mobile payment technology'
Several weeks ago, Spark released the latest iteration of its ‘Never Stop Starting’ positioning via a 30-second spot that depicted a protagonist using Spark’s mobile payment technology across a varied range of jobs in different locations.
This TVC was then followed up by two Tech in Sec segments that elaborated Spark’s mobile payment system, which enables business owners to accept payments while on the go.
The device has been targeted primarily at smaller business owners, and offers an alternative to the clunkier EFTPOS alternatives that currently dominate electronic payments in the country.
“Your plumber or lawnmower man can turn up at your place with one of these [devices], which wirelessly links to their smartphone or tablet, then you can pay right then and there on the spot,” says Tech in a Sec presenter Matt Gibb when explaining how the device works. “Now you’re not going to get stung with any hidden surcharges, and it’s totally secure.”
The system, which was developed in partnership with Optimizer, will cost $399 upfront, and, while there are no subscription charges or fixed contracts, users will be charged a transaction rate of 2.75 percent for national credit cards (charities get a special rate of 0.95 percent).
In an August release Spark’s mobile and business chief executive Chris Quin said that this business model was selected in response to customer demands.
“We have done extensive research with our business customers, looking at what we can do to make their lives easier,” said Quin at the time. “A mobile payment solution was something that they repeatedly asked for as a means of cutting down on paperwork and freeing up cash flow, but business owners didn’t want to pay the earth for it or be locked in to paying a monthly fee for years.”
But in an increasingly cashless society, which is being driven by the fast pace of the digital world, Spark isn’t the only company that is attempting to get a cut of the profits to be made in providing an electronic payment service.
Until now, electronic payments in New Zealand have largely been facilitated by two providers: Paymark, which processes 75 percent of all payments, and EFTPOS New Zealand, which looks after the remaining quarter.
And although the term EFTPOS is used generically to refer to all card-based payments, the companies are in fact disparate entities owned by different companies.
EFTPOS New Zealand is owned by Verifone, while Paymark is owned equally by ASB, Westpac, BNZ and ANZ.
Until now, the control that these two companies have had over the electronic payment methodology has been attributable largely to the fact that they held the technology to ensure that payments were made instantly and securely.
But, in much the same way that a Nokia 5110 today looks clunky when placed next to an iPhone 6, traditional EFTPOS technology is starting to feel a nudge from modern digital advances that are making mobile payments easier than they were before.
In June, business journalist Bernard Hickey wrote an opinion piece in the Herald in which he explained that the slew of PayWave and PayPass contactless payment options being released by banks and technology companies was putting the current EFTPOS system under threat.
According to Hickey, this is problematic for Kiwis because the contactless payment technology is owned by MasterCard and Visa, meaning that New Zealand could face a similar case as that being experienced in Australia, where surcharges have become commonplace.
Hickey says that the status quo could be maintained by the TSM, a body that has been formed by ASB, Westpac, ANZ, BNZ, Spark, Vodafone and 2degrees with the aim of creating a collaborative mobile wallet system.
While, as Hickey says, the TSM could potentially create an industry standard, it is only set to launch on 8 October, over a year after it was first announced.
There have also been a few hiccups along the way, which indicate that the members might be more interested in doing their own thing.
In July, for example, Westpac launched its own digital wallet—a move TSM NZ chief executive Rob Ellis didn’t seem too enamoured with.
"While we're disappointed that Westpac aren't going to be there for launch with us, we continue to engage with them and hope to see their services in the TSM wallet in future," he told Stuff at the time.
And Westpac isn’t alone in providing independent payment solutions to customers. ASB recently launched the PayTag, a device that the bank’s general manager of payments Matt Bartlett says negates the need for carrying copious cards.
“PayTag is one of several mobile payment initiatives that ASB is currently exploring,” he says. “This novel sticker gives customers the ability to make payments on the go, without the need to carry a wallet or cash, at any contactless enabled merchant terminal. Several thousand customers have already registered for PayTag since its launch last week. The trial has been very successful with a number of learnings resulting in app and process improvements.”
Bartlett did however throw ASB’s weight behind the TSM initiative, saying that it has an important role to play.
“TSM is addressing a distinct consumer and merchant problem,” he says. “We know that consumers are frustrated by carrying multiple cards and coupons in their wallet. We also know that merchants are looking for new and innovative ways to reach customers with point -of-sale offers and discounts to drive sales and loyalty. We are fully behind the TSM initiative and are looking forward to the imminent launch and pilot of the first version of the wallet in October. We see the TSM utility and wallet capability as complementary offerings within our overall portfolio of payment products.”
And a media spokesperson from ANZ says the blue bank is also experimenting in the payment field by working on several new systems, one of which will be similar to what Spark has taken to the market.
Interestingly, at the end of 2012, ANZ sold its share in EFTPOS New Zealand to Verifone. The ANZ spokesperson says that this move was made on account of ANZ attempting to streamline its business.
“In recent years ANZ NZ has embarked on a simplification strategy focusing on our core business,” says the spokesperson. “While the merchant-acquiring business is part of our core bank offering, the terminals and POS switching businesses are an increasingly specialist technology business and it made sense for it to be owned by VeriFone … The sale of EFTPOS New Zealand to VeriFone positioned these businesses for growth, while the ongoing relationship with EFTPOS New Zealand helped ensure ANZ NZ could continue to deliver excellent payments service to our customers in New Zealand.”
The spokesperson was also asked whether EFTPOS machines were becoming obsolete given the rise of alternative payment options, but he was cagey in his response saying: “All payment options are changing to meet customer needs. EFTPOS machines have changed with features like contactless capability, and are still a highly effective and cost-efficient payment option for a large number of merchants. The new Verifone terminals coming into New Zealand will be the best in the market.”
EFTPOS New Zealand’s marketing communications manager elaborated further on this point, saying that the organisation is poised to release a range of new products in early 2015.
“EFTPOS NZ will be launching a new range of VeriFone products into the NZ market in 2015 called ‘PAYware mobile’ which is a suite of devices that integrate with an iphone or android, iPad or tablet to create a complete point of sale,” she says.
She went on to say that EFTPOS technology would continue to remain relevant in an increasingly digitised environment due to steps Verifone has taken to ensure that its offering isn’t left behind.
“We are not concerned about the rise of mobile options as all of our EFTPOS NZ terminals are equipped with the ‘NFC’ (near field communications) technology, which will allow any payment to be made by connecting a customers’ ‘mobile wallet’ on their smartphone with a terminal to make payment,” she says. “VeriFone is the leading payment solution provider globally and are at the forefront of the shifting paradigm from traditional terminal hardware to ‘commerce enablement’ allowing customers to take payment, engage with the customers and accept loyalty schemes … through the use of mobile devices.”
Clark’s comms counterpart at Paymark also points out that Kiwis still have a preference for traditional debit card payments.
“Consumers still use debit as their preferred form of payment for 67 percent of all retail purchases,” says the spokesperson. “In terms of recent developments in regard to contactless payments and their impact, they currently only account for 2 percent of Paymark’s transactional volume.”
The spokesperson is also confident that Paymark will be able to continue developing its offering to stay abreast of technological advances in spite of the growing level of competition.
“Traditional EFTPOS terminals will evolve to cater for mobile payments as we have seen with NFC (near field communications) enablement and contactless card processing.”
While the spokesperson takes an optimistic view that more options are “good for the consumer and the merchant,” it’s quite evident that the players in the market are looking to move into a space that’s up for the taking—and, as illustrated by some of the moves made thus far, this may or may not happen within the remit defined by existing alliances.
For now, attention turns to 8 October, when the TSM outlines what its offering will include. But regardless of what is delivered on the day, it is unlikely to deter the players in the industry from developing their own payment options in our cashless society.
And, in the event that none of the available options meet our requirements, then we could always follow the Germans’ lead and return to cash.