Eftpos to overhaul pay network
In a move that will allow it to better compete in online and mobile payments, the company will replace a complex series of linkages between banks and retailers with a central hub.
The linkages - cables between banks that allow them to arrange transfers - are a legacy of the launch of eftpos in the 1980s.
When the system was set up, banks arranged to have individual links to each other bank and major retailers. Over time it has evolved into a complex network that is expensive to upgrade.
Under the new plan, it will replace these bilateral links with a centralised hub that each bank can connect to.
On Wednesday the company revealed it had signed an agreement with US-listed FIS - the biggest provider of payment technology in the world.
Eftpos managing director Bruce Mansfield said the new initiative could be one of the most significant changes in the payments sector in almost 30 years.
"Over the past three decades, Eftpos has been a trusted, secure and accessible payment option for Australian consumers and merchants and we are determined to see that remains the case into the future," Mr Mansfield said.
"This project will help us to retain local choice and competition in the Australia payments market as we move to new technology platforms such as mobile and online."
About 70 per cent of all debit card transactions are conducted through the eftpos system, but it has recently been losing market share to Visa and MasterCard, which are reporting strong growth in contactless payments in particular.
Frequently Asked Questions about this Article…
Eftpos Payments Australia is replacing its old web of bilateral links between banks and retailers with a centralised hub. The overhaul aims to modernise payments infrastructure so eftpos can better compete in online and mobile payments and retain local choice against the growing use of Visa and MasterCard.
The legacy system relied on individual bank-to-bank links created in the 1980s, which evolved into a complex and costly network to upgrade. The new plan replaces those bilateral connections with a single central hub that each bank can connect to, simplifying and modernising the infrastructure.
Eftpos has signed an agreement with US-listed FIS, which the article identifies as the biggest provider of payment technology in the world. FIS will be a key technology partner in delivering the new payments platform for eftpos.
About 70% of all debit card transactions are conducted through the eftpos system, although the article notes eftpos has recently been losing market share to Visa and MasterCard.
The upgrade is intended to improve eftpos support for online and mobile payments, which could make it easier for merchants to accept eftpos and give consumers more local payment choice. The initiative is pitched as a way to keep eftpos secure, accessible and competitive as payment habits shift.
Eftpos is positioning the overhaul as a pushback against the fast growth of debit cards that rely on the Visa and MasterCard networks. Visa and MasterCard have been reporting strong growth in contactless payments, so the eftpos upgrade aims to help maintain competition in the Australian payments market.
Yes. Eftpos managing director Bruce Mansfield described the project as potentially one of the most significant changes in the payments sector in almost 30 years, given the shift from legacy bilateral links to a centralised platform.
Investors should watch for announcements about rollout and adoption, changes in eftpos market share versus Visa and MasterCard, merchant and bank connectivity to the new hub, and any updates on the eftpos–FIS partnership—all signs of how effectively the platform gains traction in online and mobile payments.
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