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How big is the mobile payments market in New Zealand, anyway?

  • Technology
  • November 11, 2015
  • Elly Strang
How big is the mobile payments market in New Zealand, anyway?

Mobile wallet company Semble launched in New Zealand in March 2015 for payment with ASB and BNZ customers, then in June rolled out its transport offering with Snapper.

In its research report, ‘The State of Pay’, Semble doesn’t specifically disclose how many customers it has.

Instead, it says “thousands of Kiwis” are using it and provides statistics about the contactless payment market in more general terms, which includes contactless debit and credit cards.

It says 21 percent of terminals in New Zealand are now contactless payment enabled, up from zero in January 2013.

This correlates with Consumer NZ, which says there are more than 10,000 contactless terminals in New Zealand at major chains like Countdown, Z Energy, Farmers, Kmart and The Warehouse.

These payments make up 15 percent of point-of-sale transactions and 10 percent of point-of-sale spend.

As well as this, 100 percent of supermarkets and 95 percent of service stations have contactless terminals.

Semble reckons Kiwis are ready for the next step: making loyalty cards and vouchers available via mobile wallet, which Apple Pay in the US is currently offering to its customers.

It says Kiwis are ready for this because smartphones play a big part in their lives.

Over three quarters (77 percent) of New Zealanders own a smartphone and 69 percent of those owners are using business or banking apps, which is an easy transition into using a mobile wallet.

In New Zealand, Semble doesn’t have any competitors yet.

Apple Pay has announced it will enter Australia and Canada by the end of 2015 and Spain, Singapore and Hong Kong in 2016, but it has no plans to go up against Semble locally.

Overseas, retailers are increasingly rolling out contactless payment terminals to accommodate Apple Pay, which is available to all iPhone 6 and 6 Plus users.

At a conference in October, Apple VP Jennifer Bailey announced Starbucks, KFC and Chili’s restaurants would start accepting Apple Pay in 2016, joining 700,000 other locations across the US including Nike, Macy’s, McDonald’s and Sephora stores.

This is up from 220,000 locations in September 2014.

Samsung Pay is also focused on larger markets and isn’t launching in New Zealand for the time being, while Android Pay doesn’t seem to be entering New Zealand anytime soon either.

The report ends by noting customers still haven’t completely warmed to mobile payments, perhaps shedding some insight into why Semble isn’t disclosing how many customers it has.

“While some of the world’s biggest companies are ready to invest in mobile payments, it doesn’t mean the customer is. Mobile wallets are still very new to consumers and security concerns remain a priority. Understanding how people are going to feel about ceding control of their payments to Apple, Google or Samsung, remains interesting territory that Semble will monitor,” it says.

Another reason could be New Zealand retailers not wanting to implement contactless payment terminals due to the fees.

A recent report by Covec found contactless card fees are higher in New Zealand than in other countries and could cost retailers as much as $3.1 billion over the next 10 years.

Semble’s bank partner BNZ has previously declined to disclose what the fees for the Semble transactions, saying “We treat each customer individually depending on their customer processing method, the types of cards the merchant processes, and the average ticket size of the transactions.”

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