The technology behind contactless payments allows Kiwis to use a number of particular credit cards, phone apps, and mobile banking apps to make these payments. For example, Gem Visa can be used with a range of mobile wallets, including Apple Pay, Google Pay, Fitbit Pay, and Garmin Pay – delving into the world of wearable fintech.
Latitude’s Chief Country Officer for New Zealand, David Gelbak, says the tipping point for this kind of technology tends to be mass adoption by grocery retailers, public transport and big-box players: “All of a sudden that really expedites uptake. It’s a great, convenient way to shop for customers.”
An exciting feature Latitude has recently begun offering is instant provisioning. This technology means that as soon as a customer is approved for a Latitude credit card such as a Gem Visa, they can download the Latitude App and access a working virtual card from their mobile device.
Gelbak explains how it works: “You might be sitting in a cafe. You download the Latitude App, a virtual Gem Visa is provisioned to you, and you can pay for that coffee.”
A physical card is also delivered to account for the many merchants that don’t have contactless terminals.
“Instant provisioning really helps with a customer pain point where, traditionally, you apply for a credit card and then you wait six, eight days for it to come in the mail,” Gelbak says.
It’s recently been reported that some New Zealand banks are working on unbundling contactless debit card payments from higher-fee credit card payments. However, it’s yet to be seen if the government will step in to regulate the prices of contactless payments. Compared to Australia, where a contactless debit card fee is around 0.6 per cent, this fee is 1.2 per cent in New Zealand.
A discussion on these higher fees is necessary, as there’s a great benefit to retailers in using contactless terminals in New Zealand. Convenience has been cited as a leading factor towards purchasing by the 2019 Future of Retail Report. The more transactions are speedier and efficient; the fewer employees are needed.
Consumers love the convenience of contactless payments with reduced lines at the counter, particularly when purchasing convenience products or engaging in ‘chore’ shopping.
For tourists, a lack of contactless payments is challenging to navigate and can lead to a loss in sales. On 14 October, The WaiPay project was launched in Waipara. This project was set up to encourage and educate local retailers about the benefits of contactless payments. With Waipara being a tourist hotspot, the benefits of contactless payments cited by the project include broadening of customer bases and competing with bigger merchants.
Across the ditch, Sydney recently scrapped commuter cards to cater for contactless payments, as part of a long-term plan to turn Sydney into a ‘smart city.’ Australians are increasingly using contactless payments when out shopping, perfect for time-poor consumers.
Ultimately, Kiwi fintech is advancing, but uptake of contactless payments is not. The ability for contactless payments will help all retailers to get on an even playing field, particularly when it comes to customer convenience and choice in how to pay.
This story was created with the support of Gem powered by Latitude.