The mobile payment sector is heating up, with 2degrees launching a new smartphone that can be used in place of the Snapper payment cards accepted in many buses and taxis in Wellington.

The phone, the LG Optimus Net, uses Near Field Communication (NFC) technology to allow users to make payments by simply holding the device up against a payment terminal.

The phone doesn’t even need to be turned on, although if it is, the ‘Touch2Pay’ application will display the user’s account balance after the payment is completed.

As well as taxis and buses, the system will also work in the retail shops which are partnered with Snapper.

Other NFC handsets in different price categories will be released by 2degrees throughout the year.

The announcement comes in the same week Telecom announced a trial of NFC technology in Auckland, and a month after the country’s telcos pledged to work together on a mobile payment infrastructure.

The LG Optimus Net will retail for $299, and is currently only on sale in Wellington.