Online rival to PayWave proving popular in Wellington

The trial of a new contactless payment system in Wellington is about to wrap up.

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Choice boasts much lower fees than other options on the market. Source: 1 NEWS

Choice is an alternative to PayWave, but boasts much lower fees than other options on the market.

Fraser McConnell is one of the co-founders of the project and says for some businesses, those fees can be crippling.

"Despite thinking that our merchants have options, they just don't - they don't. They don't have a better means of payment; they don't have a better option," Mr McConnell said.

Currently, retailers pay a small fee every time someone uses the PayWave function on their debit card.

Recent research from Retail NZ showed the average fee charged for contactless transactions is 1.2 per cent, much higher than Australia (0.6 per cent) and Britain (0.3 per cent).

To undercut that, Choice has been charging a flat fee of 10 cents per transaction for the duration of the trial.

Half of that is going to Soup Kitchen Wellington, with several other charities registering their interest.

"Payment is very similar from going straight from your bank account straight to the merchant's bank account - there's no need to put a middle man or a card between that," he said.

One local business 1 NEWS spoke to said the fees associated with PayWave quickly add up.

"It's down to the hundreds of dollars a month, which is thousands of dollars a year and for me, it was quite a shock to realise you have to pay that," said Tait Burge, the owner of Swimsuit Cafe in Wellington.

He says Choice has been a big hit with customers.

Around 500 people have signed up to the app in the last fortnight.

"Usually, what happens is they all pay with it and the person behind them will ask, 'How did they just pay for their coffee?' and then it kind of sparks up the conversation," Mr Burge said.

The Wellington trial wraps up on Monday, with plans for a similar test run in Auckland later this year.