Local innovations provide Retailers alternatives to fees

Local innovations provide Retailers alternatives to card fees
Auckland, 23 April, 2018

EFTPOS was introduced to New Zealand in 1981 and was an immediate success making New Zealand world leading in payments and transforming New Zealand into one of the world’s most cashless countries. Retailers and customers alike flocked to its simplicity, and the growth of EFTPOS transformed the retail sector practically overnight. NZ Inc was delighted as the hefty cost of paper money was no longer an issue.

Now we’re told that the growth of credit and debit cards with their associated fees, puts us well behind the rest of the developed world when it comes to the use of digital payments.

Retail NZ’s annual study shows that in New Zealand we pay on average twice as much as Australian retailers do, and between three and six times as much as they do in the UK.

Paymark believes the answer for New Zealand retail is a new competitive eco-system that provides innovation and choice to consumers and retailers about how payments are made. Elliott says a locally based next generation of digital payments, built on Paymark’s Open Payments Platform, can deliver low cost alternatives to the global players but as with the 1981 EFTPOS, it needs support from the industry to provide a truly ubiquitous service, says Chief Product and Marketing Officer, Maxine Elliott.

“EFTPOS was world leading when it launched and New Zealanders were justifiably proud of the cutting edge capability of our payments network. Over the past 35 or so years, that lead has slipped and now according to the Retailers Association we are one of the most expensive places in the world to conduct electronic transactions,” says Elliott.

Uptake of EFTPOS was driven by both retailers and consumers alike and boiled down to the ease of use, ubiquity of the service and the simplicity of the payment mechanism. Retailers would only pay for the rental of the terminal – around $15 a month to enable EFTPOS payments – and not for each transaction. Internationally, most countries charge a transaction fee for EFTPOS use and that has hindered uptake.

Locally, the cost of new innovations such as contactless has lead to many shop keepers refusing to accept credit cards or contactless payments.

“Because the retailer pays these fees directly they have been reluctant to take up the next wave of digital payments technologies and that means New Zealand customers don’t benefit from these advances,” says Elliott.

Paymark is working with the industry on its Open Payments Platform and has already launched Online EFTPOS, which enables retailers to work with banks’ existing apps to provide an online shopping experience that is fast, simple and secure and cost effective. Paymark would like to develop this capability further.

“We see a world where person-to-person payments are commonplace, where consumers can pay tradespeople via an app, where retailers can identify and reward repeat shoppers in real time. New alternative innovations that we at Paymark can provide will once again put New Zealand back on the map at the forefront of a low cost innovative payment future.”

ENDS

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