Australian lender ANZ has signed a deal to offer Apple’s mobile wallet service Apple Pay to its five million customers.

The service allows customers to make purchases at participating stores with their iPhone 6, iPhone 6 Plus and Apple Watch.

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It does not require Apple Pay-specific contactless payment terminals, and can work with existing contactless terminals.

When a consumer adds a credit card to Apple Pay, the actual card numbers are not stored on the device, or on Apple servers. Instead, a unique Device Account Number is assigned, encrypted and securely stored in the Secure Element on the device.

Each transaction is authorized with a one-time unique dynamic security code.

ANZ chief executive Shayne Elliott said: "The introduction of Apple Pay is a significant milestone in our strategy to use digital technology to provide our customers with a superior experience and will be a watershed moment in the adoption of mobile payments in Australia.

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"I’m proud we’re the first major Australian bank to offer Apple Pay and we are confident the convenience, security and privacy will be well received by our customers.

"With the high adoption rates of contactless payments in Australia, our customers will be world leaders in their ability to use their mobiles to make the vast bulk of essential payments," Elliott added.

Apple Pay launched in Australia five ago with American Express as its exclusive partner.

According to ANZ, over 60% of all card transactions in Australia are contactless, and are supported by 70% of merchant payment terminals around Australia.