Mobile networks partner with Paymark in NFC joint venture

Commercial services expected in the New Zealand market next year

Vodafone, Telecom and 2degrees, along with Paymark, are forming a joint venture to allow users to make secure payments, collect loyalty points and use public transport via their mobile phones.

The service will use near-field communications (NFC) to enable the secure transfer of information stored on the customer’s phone to a retailer’s EFTPOS terminal.

At a checkout, customers will be able to make payments by holding their phone close to an NFC-enabled payment terminal. The transaction will be sent over the banking network.

The aim is to create an ecosystem where banks, mobile operators and others, such as loyalty schemes, transport companies and the like, can take part.

Key to the project will be the appointment of a company to create a trusted service manager (TSM).

Last year, Vodafone conducted an NFC trial with the Bank of New Zealand. Steve Rieger, general manager wholesale and new business, says they used exactly the same technology as is planned for the new service.

“We were doing it using a trusted service manager out of Europe,” he says. “We took a bunch of services and did the work manually.”

Rieger says there are a number of companies around the word that build TSMs. “Typically, they’re in the payment and security space.

“I expect the joint venture will issue an RFI, come to a short list, then probably an RFP.”

The joint venture has yet to be concluded, he says, but should be only a few weeks away from sign-off.

Rieger expects NFC-enabled phones to be available later this year, probably around September. EFTPOS terminals will also have to be upgraded.

“I expect we’ll have commercial services probably around the middle of next year.”

Paymark CEO Simon Tong says it’s the first time this particular mix of organisations has come together to provide a centralised TSM. “Our priority is to ensure that the technology adheres to the most rigorous global standards.”

Vodafone, Telecom and 2degrees expect to develop their own innovative services on top of the open platform structure to be provided by the TSM.

2degrees CEO Eric Hertz says that over the past decade the mobile phone has swallowed newspapers, maps and cameras to become an essential all-in-one device. “The next logical step is to make it even more convenient by having it swallow our wallet and making it the only thing you need to grab when you leave the house in the morning.”

Telecom CEO Paul Reynolds says New Zealanders have a track record of being early and enthusiastic adopters of transformative payments technology.

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