KEY POINTS:
Bus passengers in South Korea are at the forefront of the cashless society. When they jump on board they pay with a wave of a mobile phone.
Peter Maire, chairman of eftpos terminal maker Cadmus, said the use of cellphones to make payments - called near-field communication -
helped make South Korea one of the most advanced centres for payment technology.
"When you want to get on a bus, get on a train, get on an underground, you just present your phone next to the reader," Maire said.
"That's where the payments industry is going, everything is going wireless, those are the sorts of things we need to be pursuing."
Last week listed payment technology firms Provenco and Cadmus Technology proposed merging with the aim of building a top 10 global player with turnover of $500 million.
"We all want it faster, we want it more conveniently, that's what's driving it," Maire said of the new payment developments.
There was now computer software to enable cash transactions using cellphones. "You create a wallet and you put some money into that wallet. And now you can spend that money."
Chip card technology, which was common in Europe, was also making transactions easier and more secure.
"You can move money on to your card so now you're actually carrying around money," he said. "That [store] machine doesn't have to ring up and check out your bank account back in New Zealand."
Cadmus designs and manufacturers its own eftpos terminals, including technology installed in about 20,000 taxis worldwide.
Provenco's business includes distribution of retail point of sale, bar-coding, mobile and wireless products and forecourt payment systems used in more than 6000 service stations in 23 countries.
There was an opportunity to grow in the unattended terminal market, although Maire was cautious not to talk too specifically.
"There's lots of other things - parking meters, ski lifts, lots and lots of things these days where we don't want to have to go running around to find someone to pay," he said.
"Some of that stuff we don't really want to talk about publicly because it alerts our competitors as to what we're up to."
The challenge for many technology companies was acquiring the necessary size and scale to grow in international markets, he said.
"I guess that was step one for us."
However, one business model did not fit all markets.
"You have to craft a strategy to fit a market," Maire said.
Provenco chief executive David Ritchie said speed of development was one reason behind the proposed merger.
"I think by bringing the skills, expertise and capabilities together we actually can play to a much wider audience and develop products quicker and then scale them out into markets quicker."
The number of electronic devices people carried would consolidate as technology improved, although as the world moved further towards mobile payment there was also concern about financial security, he said.
"We think there's a thread through the middle as things improve and people's requirements change, and they become more demanding at a time that we've got security. There's going to be a lot of opportunities to actually innovate, create and then deliver solutions," Ritchie said.
The internet had played a part in the number and speed of transactions, with dramatic growth of home shopping during the past five years.
"Our expectation is that in time most if not all store-based devices will be linked up through [internet protocol] ... through that pipe you'll be able to do a lot more than just payment."
People today were generally more accepting than previous generations of change and took advantage of advances in technology, Ritchie said.
"The need to be able to transact in a fluid environment or a mobile environment is only going to step up as time goes on."
Shareholders will vote on the Cadmus/Provenco merger in December. It will then require Commerce Commission approval.
PROVENCO AND CADMUS
* Provenco supplies eftpos payment and retail technology in New Zealand. Its Vantex Technology subsidiary distributes payment technology in the Asia-Pacific region, accounting for about 60 per cent of revenue. Annual revenue to June 30 was $170.9 million.
* Cadmus designs, develops and manufactures eftpos terminals and exports to countries such as Australia, Malaysia, Singapore and Nigeria. Annual revenue to June 30 was $25.4 million.
* The companies announced last week plans to merge. Shareholders will vote on the proposal in December.
