Close
 

‘Kiwi success story’ Eftpos marks 30 years – but NZ is falling behind on contactless ‘tap and go’

  • News
  • November 8, 2019
  • Rachel Helyer Donaldson
‘Kiwi success story’ Eftpos marks 30 years – but NZ is falling behind on contactless ‘tap and go’

Paymark is celebrating 30 years of Eftpos use in New Zealand, during which time Kiwis have spent nearly a trillion dollars by swiping their cards. 

But New Zealand retailers, consumers and tourists are increasingly frustrated that, at the end of 2019, contactless payments – now commonplace overseas – are lagging behind due to higher bank fees.

Thanks to Eftpos, New Zealand was an early adopter of electronic payments three decades ago. In the Nineties and early 2000s Kiwis travelling overseas were smug – and shocked – to find Eftpos was not used in countries like the UK. Customers still had to sign a docket to authorise a payment instead of entering a four-digit pin number. Britain’s equivalent card payments system, known as “chip and pin”, was only introduced in 2004. 

In Aotearoa the first Eftpos transaction took place in 1984, at a terminal installed in a Shell petrol station and connected to a bank computer. 

But Paymark CEO Liam Reilly says that it wasn’t until 1989 that major banks and retailers “really started to get on board with it”. New Zealand’s four banks at the time joined forces to set up Electronic Transaction Services Limited (ETSL), which is now Paymark.

The rise of Eftpos was a particularly “Kiwi success story”, he adds. “No country in the world embraced Eftpos in quite the same way. By 1989 we were conducting a million transactions every year and then things really started to get going.”

Today there are 1.6 billion transactions every year. “Every second of the day sees more than 150 transactions take place and Kiwis swipe their cards for everything from coffee or groceries through to the purchase of televisions or even cars.”

Crucially for customers using Eftpos it is free, while retailers pay a small flat fee. Paymark estimates that Kiwis have saved around $8 billion in terms of fees that would have been applied if Eftpos didn't exist.

The Paymark network now offers contactless payments, too, whether from a card (Paywave is Visa’s contactless debit card while Paypass is Mastercard’s), a smartphone (using Apple Pay or Google Pay) or a smartwatch (via Fitbit Pay and Garmin Pay). 

Time-poor consumers love contactless payments and the ease of ‘tap and go’. 

Retailers also embraced the system when it came in earlier this decade – until they got hit by the bank fees. 

Contactless debit cards have average fees of about two percent per transaction and, unlike in many other countries, these aren’t regulated or capped. 

As Newsroom’s Bernard Hickey noted in October, “Debit payments that had once been virtually free Eftpos transactions or slightly more expensive Visa or Mastercard debit payments suddenly became contactless credit or debit transactions with double or quadruple the fees.”

Overnight, retailers stopped using contactless almost immediately, Hickey says. Several years on, those original, now-familiar ‘No Paywave’ signs are looking “tatty” and even “manky”.

Meanwhile, there are now more ‘No PayWave’ stickers than ever plastered on POS machines across the country.

Kiwi retailers offering contactless pay almost twice as much as retailers pay in Australia for the service, and almost four times as much in Britain.

In those countries, all cafes, restaurants and retailers accept contactless Visa and Mastercard payments, particularly through Apple Pay and Google Pay phones. Retail in the UK is around 70 percent contactless, in Australia it’s a staggering 90 percent.

It’s not surprising then, that many visitors to New Zealand are frustrated they can neither wave their cards or their phones with Apple Pay and Google Pay to pay like they do at home.

Commerce Minister Kris Faafoi has warned banks they face regulation unless they show more urgency in changing the system. At the moment retailers are paying almost $400 million a year in bank fees for contactless payments. 

Retail NZ CEO Greg Harford also wants the banks to move faster to unbundle fees so retailers can use the technology more widely. 

“Ultimately, consumers love the convenience and we’re out of step,” he told Newsroom. “And ultimately it costs merchants sales if they don’t have that facility available.”

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.

 

Casual brows

  • Opinion
  • November 18, 2019
  • Sarah Dunn
Casual brows

As competition hots up between internationals and local brands in the beauty category, NZ Retail and The Register editor and associate publisher Sarah Dunn considers what comes next.

Read more
 
 

How New Zealand businesses performed in China’s 11.11 shopping festival

  • News
  • November 15, 2019
  • The Register team
How New Zealand businesses performed in China’s 11.11 shopping festival

This week marked Singles’ Day - a Chinese holiday run by mega-retailer Alibaba that, while still relatively unknown in the western world, is surpassing Black Friday and Cyber Monday in scale and sales. Alibaba reports it generated US$38.4 billion of gross merchandise volume this year.

Read more
 
 

Building transparency in your supply chain

  • Opinion
  • November 14, 2019
  • Vanessa Thompson
Building transparency in your supply chain

Brands are under pressure to become more ethical, but how does this pressure apply to Kiwi fashion retailers? Unravelled Consultants founder and director Vanessa Thompson explains.

Read more
 

Social scoreboard

Zavy and The Register have worked together to create a scoreboard that compares how the top 25 traditional media advertising spenders in New Zealand have performed on social media over the past 30 days, updated in real time.

 
topics
Concept to closet
Business coverage of New Zealand Fashion Week.
Regional rollercoaster
What does retail look like in 2019 for ...
Town centres
A positive retail environment over the past 12 ...
Amazon Arrival
Keeping up with all things Amazon as it ...
The Retail Yearbook 2017
As we battle our way through the busiest ...
The future is bright
We spoke with four retailers in their twenties ...
Hospitality enhancing retail
Some think food and integrated hospitality offerings will ...
Spotlight on signage
At first glance, the humble in-store sign might ...
Red Awards 2016
The Red Awards for retail interior design celebrate ...
Auckland Unitary Plan
Auckland is changing. The Unitary Plan will decide ...
How to open a store
Sarah Dunn considers what it would take to ...
All things to all people
Kiwi retailers share their omnichannel strategies.
Rising stars
Retail's top young achievers.
Delivering on your promises
The sale isn't over until your item is ...
Retail in heartland New Zealand
Retailers keep the regions pumping, but how strong ...
Sisterhood
Women in retail help one another. We spoke ...
The changing face of retail
Shifting demographics are creating big changes in New ...
The retail yearbook
With the help of experts in the retail ...
Retail rogues
We put the spotlight on staff training. Jai ...
Here come the giants
Topshop has arrived in Auckland’s CBD, David Jones ...
From retail to e-tail
Ecommerce has become part of the way mainstream ...
Loyalty in the digital age
How are retailers maintaining loyalty? Sarah Dunn, Elly ...
Window shopping: A spotlight on social media
Sarah Dunn and Elly Strang look at how ...
The Innovators | In partnership with Spark Business
Technology is rapidly changing the retail industry as ...
 

Coastlands celebrates 50 years in business

  • Opinion
  • November 13, 2019
  • Jennie Gutry
Coastlands celebrates 50 years in business

Coastlands Shoppingtown in Paraparaumu is celebrating its 50th year in business. Coastlands 50th birthday event manager Jennie Gutry shares some reflections on the centre's early years.

Read more
 
 

Me|today pairing skincare and supplements launches

  • News
  • November 13, 2019
  • Sarah Dunn
Me|today pairing skincare and supplements launches

Consumers are often highly engaged with the brand that produces their skincare products, but less so when it comes to supplements. The idea behind me|today, a start-up selling paired product in both categories, is to leverage that engagement.

Read more
 

Michael Hill to offer lab-grown diamonds in New Zealand

  • News
  • November 11, 2019
  • Sarah Dunn
Michael Hill to offer lab-grown diamonds in New Zealand

Traditionally, prospective proposers should spend three months’ salary on an engagement ring. It should be a diamond solitaire, ideally one carat or bigger. However, in a market where many younger shoppers are struggling with student debt, concerned about housing affordability and suspicious of mined diamonds’ ethical credentials, Michael Hill has moved with the times and introduced an alternative.

Read more
 
Next page
Results for
Topics
Jobs
About us.

The Register provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2015 Tangible Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

Advertise
The Register

editor@theregister.co.nz

Content marketing/advertising? Email anita.hayhoe@icg.co.nz or call 022 639 3004

View Media Kit

}