The first of its kind digital wallet called Pago has been launched in New Zealand, enabling cash transfers to be made via mobile phones or the internet.

The new digital cash service is ideal for low-value transactions, with a maximum expenditure of NZ$200 a day. It can be used for transactions such as splitting restaurant bills, sharing petrol or buying low-value goods online, Pago says.

To make a payment, the Pago wallet holder will only need to know the mobile number, the email address or the Pago name of the person being paid. Confirmation of payments will be sent via SMS or email.

Marcus Robins, general manager of Pago, commented: It’s a unique form of payment. Pago has the potential to transform the way New Zealanders pay each other for small-value items online and while they are out and about in much the same way EFTPOS changed the way people paid for retail goods and services in-store.

Consumers can visit Pago’s website to sign up to the service. A Pago account will be created and a link set up to the account holder’s bank to activate it. Once the account is activated with an initial deposit, users can make payments through their mobile phone or on the Pago website.

If the person being paid also has a Pago wallet, the money will be received immediately. If not, the payment will be available for seven days, allowing time for the other party to create a Pago account or direct the transfer to a bank account of their choice.

Some transactions are free, but sending money between Pago members and transferring money back to a bank account will incur a 30 cent charge.

New Zealand auction site TradeMe has shown a keen interest in the service, backing Pago as one of the recommended methods of paying goods sold on its website.