Visa NZ sees rapid rise in contactless card use amid strong payment volumes
Visa Inc's local unit has seen a trebling in the use of contactless card transactions over the past year, as people become more comfortable with the new way of paying for small items in a strong domestic market.
Local consumers made 3.2 million transactions using Visa's contactless payWave technology in September, the most since the technology, which lets a purchase be made without swiping a credit or debit card through a terminal, was launched in 2011, and more than three times the level it was last year, according to the New Zealand arm of the global payments company.
Contactless transactions account for about 19 percent of purchases over Visa's New Zealand network, though that doesn't translate into value terms with the contactless payments typically catering for cheaper purchases, such as groceries and petrol, Visa's New Zealand and South Pacific country manager Caroline Ada told BusinessDesk.
"We see it as making the transaction a lot faster - yes it might cannibalise other electronic payment methods, but from a consumer point of view that's a good thing because it means the transaction is happening in a much faster way," Ada said. "Cash is still the most dominant payment method in New Zealand."
Payment methods and point-of-sale systems have become an attractive investment option for a raft of companies from software start-ups to banks seeking to develop services that can deliver new earnings streams or lock in existing customers with a broader range of applications.
Accounting software firm MYOB last week launched its Kounta point-of-sale service as it seeks to become more vertically integrated, though declined to say what its customer or revenue targets were.
Visa NZ's Ada said competition in financial services and payments "is probably the best it's ever been" with a buoyant market and heavy investment in new innovation. Mobile payment systems was one of the fastest growing segments in the market, which would enable retailers the ability to accept payments without the traditional overhead costs.
"It's very buoyant market, there's a lot of competition there with a whole bunch of new entrants and fringe operators," Ada said.
Ada was upbeat about the prospects for contactless card use, with about 16,000 terminals across New Zealand can use the contactless payment form, and most major merchants already accept its use or are in the process of adopting it, as consumers grow more comfortable with it.
"We're certainly seeing a strong market in New Zealand in terms of payment volume, that's a really good litmus for a state of the economy the state of consumer appetite," she said.
New Zealand consumers have been relatively upbeat this year with low interest rates and a humming economy driving a better labour market, though increased spending hasn't quite matched the level confidence indicated in surveys. Government figures show core retail sales on electronic cards have gained in six of the first nine months of 2014, and were up by about 5.9 percent in September from the same month a year earlier.