Westpac New Zealand is trialing a digital wallet-based on Host Card Emulation (HCE) technology, charting an independent technology path to that of the joint bank and telco effort TSM New Zealand.
Announcing Westpac NZ was aiming for a digital wallet launch in the first quarter of 2015, Westpac chief product officer Shane Howell said: "We have taken our own view and we are aggressively pushing that."
"We have chosen to go this way as technology is developing so quickly and we can ensure flexibility by using HCE. Working within an industry-wide group such as the TSM (trusted service manager) may not allow that flexibility."
HCE is one method of employing Near Field Communications (NFC) for contactless payments by storing customer details in the cloud. Around 18,000 NFC capable terminals are now deployed in New Zealand.
Westpac is the first bank to trial HCE in New Zealand and only a handful of other banks are globally are doing so, Howell said. None has yet launched a product.
That puts Westpac NZ at the head of the curve, he said.
TSM NZ, a joint effort by the "Big Four" Australian-owned banks and the major telecommunications providers, is working on TSM systems embedded on phone chipsets rather than using HCE. These could potentially be faster for transactions such as public transport as they do not require network connectivity to complete the transaction.
However, Howell said Westpac's digital wallet would allow preapproval of such transactions, potentially eliminating what has been seen as one of HCE's major drawbacks.
Westpac's three month trial uses Carta Worldwide HCE technology. that enables credit and debit card details to be accessed from Android phones. Apple has not yet rolled out an NFC-enabled phone and is rumoured to be charting a different payments path using iTunes.
Users of Westpac's wallet simply download the application and enter their account details. To transact they enter a four-digit PIN number which enables the transaction for 60 seconds. In future the bank plans to incorporate loyalty programmes and identification applications.
Howell said the system was as secure as the cards people currently use.
He said Westpac's research showed customers wanted their digital wallets provided by their primary bank in preference to any third party. The key was to make such applications easy to use, "frictionless", and to give customers control.