Quest to make Eftpos simpler

By Peter Griffin

Eftpos is a deal-breaker for me. Retailers who don't have it simply don't get my business, because I never carry cash, don't have a wallet. A slightly worn ASB Eftpos card and a mobile phone are the only things that accompany me when I leave home.

It seems thousands of other Kiwis are the same. According to Paymark, which runs our Eftpos system, New Zealanders each make on average 150 Eftpos transactions a year. Only Canadians come close, at 90 transactions a year.

Most countries have electronic debit card systems but a lack of co-operation between banks and a fascination with credit in many countries mean debit cards aren't so widely used abroad.

One thing is likely to change that in the next few years - the rise of so-called contactless payment technologies, which allow you to swipe or tap a token, or even your mobile phone, in front of a payment terminal to debit your account.

Eftpos card penetration is high in New Zealand with 90 per cent of us owning one. Mobile phone penetration is more than 100 per cent - some of us own and use two.

Several companies think the mobile phone is the ideal electronic wallet, as just about everyone has one.

Imagine a device like the Apple iPhone, which already lets you make calls, surf the web, take photos and listen to music, also being the gadget you use to pay for the paper and a loaf of bread at the corner dairy.

There are only about 300,000 Eftpos terminals in use in the US, a country that has a staggering 400 million credit cards in circulation. Early entrants have been retailers such as McDonald's, which want to get queue times down and hope technology can help them do it.

Last week Vivotech, a small Californian company that makes Eftpos terminals that complete transactions with a quick tap rather than a swipe, secured US$22.5 million (NZ$30 million) to develop more terminals and an electronic wallet for mobile phones. The money came from NCR, a global supplier of cash registers and barcode scanners, and First Data, which processes debit and credit card transactions for retailers.

It's a sign that the heavyweights of the electronic payments industry are keen to pursue a more convenient alternative to the humble Eftpos card.

Paymark's Simon Tong, said the company would this year release specifications for a new generation of terminals that support computer chip-based cards, allowing greater security and contactless transactions.

Peter Maire, the founder of satellite navigation company Navman, who is now chairman of and a shareholder in Eftpos terminal maker Cadmus, also sees contactless terminals as the way forward. He said this year that he'd be using his experience at Navman to restructure research and development at Cadmus with development of such terminals in mind.

Tong said contactless technologies and greater use of Eftpos in online transactions would both be driven by consumer preferences.

But it's got to be really simple to be widely accepted - that's the challenge with using the mobile for making payments. There may well be plenty of life in my worn-out Eftpos card yet.

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