EFTPOS not in decline, won't go the way of Bankcard says new chief of EFTPOS Payments Australia
Greg Devlin doesn’t agree that Australia’s unique, locally-developed EFTPOS payments system is going to go the way of another locally-developed (but now extinct) payments innovation, Bankcard.
He’s confident that the local system does have a future, despite the growing market penetration of the
international competition from Visa and MasterCard branded debit cards.
“Its still true that the card you get when you open a new a transaction account at an Australian bank or financial institution is an EFTPOS card. And that’s because it has the features that most people want in a transaction card – like ATM and EFTPOS access.”
“The card schemes and even the banks may be promoting and advertising the online payment capabilities of Visa and MasterCard debit cards. But most people use their debit cards much more often in other places, and that’s what determines their choice of card.”
Even so, Devlin acknowledged that the scheme-branded debit cards are dominant in most of the rest of the world, and likely to become so here too if something isn’t done.
“Sure, if we don’t do anything, if we just leave things where they are, the international card schemes will take over just like they have everywhere else” he agreed.
Devlin’s opinion is worth noting, because he is the head of access and payments systems at the Bendigo and Adelaide banks.
But he is also now the inaugural chairman of a new industry-owned company known as EFTPOS Payments Australia.
The company was formally incorporated on the 14th of April and is charged with putting the locally developed EFTPOS system on a more even
footing with the competing systems offered by the giant global card companies.
Twelve local banks, financial institutions and service providers, along with Coles and Woolworths are the joint owners of the new company.
Devlin said that new company wants to build on the relative strengths of the locally developed EFTPOS system, including its very low incidence of fraud and security issues.
“EFTPOS has remained popular, despite almost no promotion, because it has the features Australian want” he said.
“So EFTPOS Payments Australia will be about ensuring that the Australian debit card system continues to provide consumers and merchants with the most secure and convenient payment options.”
Devlin’s comments were echoes of those made earlier by another key player - Chris Hamilton, chief executive officer at the Australian Payments Clearing Association (APCA).
“I don’t agree that EFTPOS is declining” he said.
“Right now about 4/5ths of the debit card activity in Australia is on EFTPOS and about 1/5th is scheme debit.”
Hamilton also said despite Reserve Bank statistics showing Visa and/or Mastercard branded debit-cards are increasingly popular, EFTPOS activity is still growing.
And he is hopeful that the new company, EFTPOS Payments Australia, will play a significant role.
“We’ve been a sort of midwife to the industry in the birth of this new company” said Hamilton.
“But now we’ve got to be at arms-length and independent of it. So although we’ve seconded an executive to the company to get it going, we’re hopeful it will soon have its own chief executive and be completely separate from us.”
Hamilton added that getting both Coles and Woolies to join the new company was a very good sign.
“Getting all the players in [to the new company] is a good sign” he said.
Even so, Hamilton acknowledged EFTPOS Payments Australia faced a difficult task, and particularly as regards developing an online payments capability for Internet shopping and bills.
He said the Reserve Bank had suggested this was a gap in the armoury of EFTPOS functionality and will be taken into account when the RBA decides whether to continue regulating wholesale interchange fees.
Asked about an APCA promise earlier this year to publish a discussion paper on the topic, he said the promise still held good.
“I’m still hoping to publish a discussion paper” he said
For more information go to
www.rba.gov.au
www.apca.com.au
www.bendigobank.com.au
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