Published on the 19/09/2013 | Written by Newsdesk

BNZ has partnered with Australian developer Mint Wireless to launch PayClip a device that transforms smartphones into mobile payment machines to solve the problem of cash flow for SMBs.

The device, a compact card reader which integrates with a smartphone app, can be attached via the audio jack to most Android and iPhones, allowing businesses to quickly and securely receive payment over the internet from Visa and Mastercard credit and debit cards. The technology, developed by Mint Wireless is based on a card-present, real-time, online solution which enables EMV-based chip and PIN transactions and emails or texts the receipt to the customer.

BNZ is the first bank in Australasia to offer technology such as this to businesses. For now customers must authorise the payment with a signature on the smartphone screen, but in phase two, scheduled for 2014, chip and pin, eftpos and NFC-enabled payments will also be available.

BNZ’s head of small business, Harry Ferreira, says, “There are 469,000 small and medium sized businesses in New Zealand making up 97.2 percent of business in New Zealand. If big business is the backbone of the New Zealand economy then small businesses are its life blood, and we know that the number one pain point for small businesses is cash flow.

“This technology allows businesses to take payments on the spot and funds will be in their account as early as the next business day. We believe this will transform the landscape of payments for small and medium businesses in New Zealand,” he adds, saying he hopes to have “tens of thousands” of customers in the next 12 months.

In the past, price has been a major inhibitor for retailers adopting mobile eftpos, with fees typically being between $65 and $150 per month. BNZ is offering the device for a nominal $10 per month rental fee plus a middle-of-the-road 3.25% merchant service fee (MSF). The device is linked to the user’s merchant banking ID and to the smartphone or tablet with which it will be used. It will be inoperable if plugged in to a different device and the bank can disable the device remotely and dispatch a replacement in the event of loss or theft.

The backend merchant portal allows users to manage their account, including resending receipts or adding a new staff member, and shows a history of transactions that can be downloaded as a .csv file for business intelligence purposes. The system does not keep any data on file beyond what is required by the payment companies, so customer data, including email addresses and phone numbers, is protected.

Ferreira says BNZ is the SMB’s bank. It has the highest percentage of SMB customers in New Zealand and has been voted the Canstar ‘Best Small Business Bank’ for the last two years. He says it is committed to supporting the sector as evidenced by the considerable effort it has focused on enabling SME businesses to un-tether from their offices, including the significant investment it has made in the PayClip device and infrastructure, as well as the low rental price for the device. “It hasn’t been a cheap exercise,” says Ferreira, but he believes that BNZ is getting ahead of the curve with a device that can deal with chip and PIN whereas others in the market are swipe only.

Asked how BNZ can offer a mobile payment option at such a significantly lower price than competitors, he said: “Our business is providing payment solutions for customers and we needed to weigh up whether we wanted to have a highly profitable product and less customers or perhaps more customers and a less profitable product. So we went for an equilibrium – we have gone for what we believe is a fair and equitable rate with a very cheap up-front cost and I think it is the mass market that we will get into and that’s when we will start making money.”

Customers are able to pre-register from today and PayClip is expected to be available from next month.