The launch of Apple’s much-hyped iPhone 6 — which will finally sport contactless payments functionality like those now offered by bank-issued payment cards — has prompted Australian financial stalwart eftpos to call for its network to be included as an option for consumers when the nifty new gadget ships here.
The bid for inclusion immediately comes as the wider payments industry contemplates what has been anticipated for years as the game changer that will force mainstream convergence of smart phones and physical payment cards.
But it’s not just shopkeepers weighing up what will happen when Apple’s long awaited payments cavalcade rolls into town.
There’s also a big rub for dozens of government agencies as they try and figure out and plan for how they’ll be able to accept new iPhone 6 payments.
For government organisations which now accept traditional card payments, the rapidly emerging question is whether Apple will see fit to integrate the distinctly Australian ‘cheque’ and ‘savings’ options which eftpos has underpinned in Australia and New Zealand since the 1980s.
The bid for inclusion by eftpos carries substantial weight in the Australian and New Zealand markets because the payments network is wholly owned by its 15 founding members, which include all of the Big Four banks, Coles, Woolworths and a range of smaller financial institutions and credit unions.
The size of the collective stake held by banks and Australia’s biggest merchants could prove to be a key influence on Apple as its latest products start to down under.
Just as importantly, the fact that the domestic eftpos network shunts a whopping $135 billion a year through its pipes coupled with its sustained effort to technologically modernise its services and firmly reassert itself in the local marketplace against overseas competitors could hold some sway.
An essential difference in eftpos’ offering to that of credit card schemes American Express, MasterCard and Visa, which Apple is partnering with for its new payments offering, is that the domestic payments network enables consumers to spend money directly from their bank accounts, hence the ‘cheque’ or ‘savings’ buttons on card terminals.
“As we move into digital payments, eftpos wants to continue to offer a ubiquitous, secure and affordable payments option for all Australian consumers who have access to a bank account, and on as many platforms as possible,” eftpos chief executive Bruce Mansfield told Government News.
“Almost all Australians have an eftpos CHQ and SAV card and should be able to use it on platforms such as the iPhone in the future.”
Until very recently, using the contactless or ‘tap’ function on payment cards had usually* resulted in transactions being automatically routed via the separate networks operated by global card schemes.
Providing access to savings and cheque accounts for electronic payments is potentially quite a big deal for the public sector, not least because consumers often don’t have much of a say over whether or not they need to make many payments – such as council rates, licensing and vehicle registrations, transport ticketing, childcare, and tax.
That rather compelling relationship with customers also means that government payees effectively have to offer the ‘cheque and savings’ option in order to provide equitable access to people who don’t have, don’t want or simply can’t get a credit card.
And while Australia might be a small (if lucrative) market for Apple, Mr Mansfield isn’t letting the local payments angle slip under the radar, saying that “eftpos would welcome the opportunity” to include its 40 million eftpos-enabled debit cards “as a safe, low cost and fast payments choice for all Australians when the Apple Pay service is made available locally.”
He said eftpos was now trialling digital payments for online and mobile with a number of financial institutions and retailers, including an Near Field Communications mobile payments solution.
“The new eftpos payments infrastructure that we are now deploying in market as part of our transformation program, provides an opportunity for eftpos and Apple to work together in Australia to leverage this important development in mobile payments,” Mr Mansfield said.
(*Many Australian banks also offer customers a ‘scheme debit’ card product that successfully mimics the tap and online transaction functionality of credit cards. Such products ultimately draw on bank debit accounts, but run on the same network used by credit cards. Somewhat confusingly, customers using scheme debit cards press the ‘credit’ button on terminals when selecting transaction types not automatically routed.)
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at firstname.lastname@example.org.
Sign up to the Government News newsletter