Eftpos Payments Australia is seeking to push back against the fast growth of debit cards that rely on the MasterCard and Visa network by overhauling its payments infrastructure.
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.