Bank of New Zealand (BNZ) has launched BNZ Pay, an innovative mobile app for retailers that transforms an Android device into a contactless payment terminal.

Enabled by new tap-on-phone technology, the app is the first of its kind in New Zealand, and the company says it will provide the lowest cost solution in the market for enabling contactless card acceptance.

BNZ executive of customers, products, and services Karna Luke says he's excited about how BNZ Pay will change the game for Kiwi SMEs.

“Whether you're a weekend market vendor, a local caf or food truck, a sole trader or taxi driver, you'll now be able to accept contactless payments – Kiwis' preferred payment option – for the lowest cost in the market by simply using an Android phone,” he says.

“BNZ Pay is safe, secure, and easy to use with an intuitive interface and a dashboard where the business can see all the sales and business info, it can issue invoices, manage customer profiles, and send receipts by text or email.

A recent Reserve Bank of New Zealand report on cash and payments data confirmed that consumer preferences are changing and shifting away from cash. BNZ says businesses need modern payment solutions to keep up with the demand from their customers.

“We've seen a seismic shift in consumer preferences around payments, especially since the beginning of the pandemic. In branches, cash use is way down, and according to RBNZ's report, only 70% of Kiwis now use cash at all,” says Luke.

“That's a big decrease from 2019 when the survey found 96% still used cash. Businesses need to be prepared and able to take payments from their customers in the ways they want to pay them. As New Zealand's leading business bank, we're focused on enabling our customers to do business in the way that suits them and their customers.

BNZ has also focused on reducing the costs of taking payments, and BNZ Pay will continue this, delivering significant savings to businesses.

“The only thing better than low cost is free, and that's what we're doing. We're thrilled to be launching BNZ Pay with no monthly costs to merchants who settle into a BNZ account until January 2024,” says Luke.

“After that, BNZ Pay will only cost $10 per month, and only in the months it's used. That's less than half the cost of the next cheapest option and means a reduction in overheads, which will support more small Kiwi businesses to thrive.

BNZ says these savings come in the wake of it simplifying and reducing the costs of taking domestic payments through its Split Payment and Package Pricing initiatives.

“When BNZ Pay is combined with BNZ's market-leading Packaged Pricing, a small business would be paying fees of around 1.1% on average for all contactless cards, which is substantially cheaper than most other published rates for SMEs currently in the market,” says Luke.

BNZ is partnering with Visa and Quest Payment Systems to deliver BNZ Pay.

Visa country manager for New Zealand and South Pacific Anthony Watson says recent research indicates consumers are likely to embrace this new, secure and convenient form of payment.

“With smartphone use now ubiquitous, tap-to-phone is an exciting solution for small businesses looking to grow in today's digital economy, enabling them to reach more customers and increase sales without the need for additional hardware,” he says.

Visa research, conducted by YouGov, shows that the top three factors that would encourage consumers to use a tap-to-phone payment method were security (40%), ease of use (39%) and the potential to save time when paying (36%).