Infratil will install its Snapper smart card readers in Auckland buses operated by subsidiary NZ Bus by the end of next year.
The move means Wellington commuters will be able to use Snapper on 80 per cent of bus services when they travel to Auckland. But it could undermine the Auckland Regional Transport Authority's bid to build its own integrated ticketing system for the city.
The authority selected French technology company Thales as its preferred supplier last year. Its system would cost tens of millions of dollars and would let people pay for bus, train and ferry journeys using a single smartcard.
Sources said the authority hoped to conclude a contract with Thales by Christmas, after receiving provisional funding approval from the New Zealand Transport Agency last month.
That was conditional on ARTA's system becoming the hub of a national ticketing system.
Transport Agency group manager Dave Brash said neither Snapper nor NZ Bus had consulted with the agency ahead of their announcement. "It would have been nice." Both are Infratil subsidiaries.
Snapper Services chief executive Miki Szikszai said Snapper would be compatible with a national ticketing standard being developed by the Transport Agency. He did not believe it would compromise a deal between Arta and Thales.
If Thales' cards were also compatible with the as-yet unratified standard, they could be used on NZ Bus services without requiring a separate smartcard reader.
The standard would be based on one in Europe, he said.
"From what we have seen, there is no concern for us there."
Brash said the agency was keen to have further discussions with Snapper and NZ Bus about compatibility with its proposal.
"It all comes down to compliance with the national standards which we are developing."
NZ Bus chief executive Bruce Emerson said its existing ticketing system was 17 years old and urgently needed to be replaced.
The first Snapper readers would be installed on Auckland buses operated by NZ Bus by the middle of the year, Mr Szikszai said.
Snapper Services would also market Snapper to shops, which could accept it for small purchases. Trials have taken place with 10 retailers in and around Queen Street.
Infratil complained to Transport Minister Steven Joyce about the Auckland integrated ticketing tender in December, arguing the authority had been biased against a proposal it had put forward to extend Snapper to Auckland and had not run the tender properly.
Snapper Services withdrew the complaint in July after the Transport Agency investigated and rejected the allegations.