Eftpos to overhaul payments system
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 is replacing a complex series of bilateral links between banks and retailers with a single centralised hub. For investors, this matters because the move is intended to modernise Eftpos’s infrastructure, help it compete better in online and mobile payments, and support local choice and competition in Australia’s payments market.
Eftpos has signed an agreement with US-listed FIS, which the article describes as the largest provider of payment technology in the world. The partnership is central to delivering the new centralised hub and modernising Eftpos’s platform.
The upgrade is designed to push back against the fast growth of debit cards that rely on the Visa and MasterCard networks. The article notes Eftpos has been losing market share to Visa and MasterCard—especially in contactless payments—so the overhaul aims to make Eftpos more competitive in mobile and online channels.
About 70% of all debit card transactions are conducted through the Eftpos system, according to the article. That large share is part of why modernising the system is important for merchants, banks and consumers.
The legacy links are bilateral cable connections set up in the 1980s that let banks arrange transfers directly with each other and with major retailers. Over time these links evolved into a complex, expensive-to-upgrade network, which is why Eftpos wants to replace them with a single, simpler central hub.
Bruce Mansfield, Eftpos managing director, said the initiative could be one of the most significant changes in the payments sector in almost 30 years. He emphasised preserving Eftpos as a trusted, secure and accessible option for Australian consumers and merchants.
Under the new plan each bank will connect to the centralised hub rather than maintaining many individual bilateral links to other banks and retailers. This is intended to simplify connections and make it easier to move to modern technology platforms like mobile and online payments.
Investors should monitor developments such as implementation progress with FIS, any reported shifts in debit card market share versus Visa and MasterCard, and commentary from Eftpos leadership about timing and outcomes. These signals can indicate whether the upgrade is helping Eftpos retain or grow its position in Australia’s payments market.
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