Semble broadens mobile wallet to head off competition





Loyalty cards and coupon offers could be the key to getting Kiwis to embrace New Zealand’s first digital wallet.

Digital wallets work by linking bank account cards to smartphones. Shoppers choose which account they want to use and then pay for items by placing their phone over a card reader.

Now, digital firm, Semble, wants to digitise everything from credit cards and coffee coupons to car keys and identification.

Seven months after launching its ‘tap-and-go’ smartphone app, the company has published a report into the main players in mobile payments.

But conspicuously absent are specifics of Semble’s own success to date.

Chief executive Rob Ellis would not provide uptake figures, saying they were commercially sensitive.

Google Play numbers suggest around 11,000 to 25,000 people have downloaded the Semble app to compatible Android phones.

“Growth has been positive and steady, and absolutely trending in the right direction,” Ellis said

Launch partners BNZ and ASB have contributed most of the 26 different cards available in the wallet so far.

However, Ellis said mobile payments alone were not currently enough to drive “material growth”.

“What will drive growth are other services beyond payments; public transport, loyalty and offers in particular.”

Wellington’s Snapper transport card has been on board since July, and Semble is “having conversations” with Auckland Transport.

Ellis said commuters in the biggest city were an attractive target, but he was unsure if there would be any transport additions in the next year.

More concrete developments will come from the company’s first loyalty and offers partners, which will be announced before Christmas.

Ellis said research showed 29 per cent of people did not have the right loyalty card with them when they reached the checkout or point of sale.

“They’ve either left it at home on purpose, because they can’t be bothered carrying around 20 cards, or they’ve forgotten it.”

A broader range of options beyond payments may give Semble an edge over incoming competitors- including its own bank shareholders.

Westpac and ANZ decided against being part of the initial launch, instead developing and trialling their own in-house wallets.

A spokesman for ANZ said its wallet would be live “soon”, whereas Westpac would only say it was happy with its own pilot, and was watching closely.

Both banks said they were keeping the door open, and Ellis was hopeful of being able to welcome them back into the fold.

He said it was possible but “highly unlikely” that individual banks would go about developing full digital wallets that went beyond payments.

“For a market the size of New Zealand, it doesn’t make sense for everyone to build their own infrastructure.”

Competing products including Google’s Android Pay and Apple Pay are also rolling out around the world, although no dates have been set for New Zealand.

Apple has refused to open the contactless technology on its iPhones to third parties, and the Semble paper acknowledged it was unlikely to do so for the foreseeable future.

However, Ellis said it was a “little-known and underappreciated fact” that 75 per cent of the smartphones in New Zealand were Android devices.

Anecdotally, some people were even switching away from iPhones when their contracts expired so they could use Semble.

According to the report, “anecdotal feedback from multiple sources” is that the introduction of Apple Pay has not gone smoothly in some markets outside the United States.

Fees have reportedly been a big sticking point in discussions with the big Australian banks, which also own the major banks in New Zealand.

“They can’t just come into market without having direct deals done with banks or payment service providers,” Ellis said.

He remained hopeful that Apple and others would choose to work with Semble.

“The doors are wide open,” he said.

“The cost and effort and time involved in forging direct relationships with literally thousands of companies doesn’t necessarily stack up for some of these big, big players.”

Ellis said one of the major advantages of being the first to market was what the company was learning from being live.

Each subsequent card and service added to the wallet would be easier and faster to integrate, he said.

Semble plans to ultimately include the likes of tickets, gift cards, library cards, swipe cards, car keys and identification.

While not science fiction, replacing everything in a wallet will be still several years off.

Ellis points out that contactless payments using bank cards have only been around for a couple of years.

While now growing in leaps and bounds, it initially took some time to pick up steam, he said.

Ellis did not expect smartphone payments to grow at the same pace, but hoped to see some parallels.

Collaboration remains Semble’s preferred approach, but Ellis was comfortable with the fact that the first competitors would soon arrive.

“It all helps with consumer awareness, market education,” he said.

“Over times, the ones that are the best…will prevail.”

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