Launched in the 1980s, debit payments company eftpos introduced a fast, simple, and secure payment system that was embraced by shoppers and merchants, revolutionising the way goods and services are paid for, and changing the retail landscape forever.
Stephen Benton is CEO and Managing Director of eftpos, an Australian debit payments company with access to 50 million cards in market that helps create innovative, bespoke customer payment experiences. At the time of its foundation, eftpos was world-leading, making it one of Australia’s first Fintechs. Today, eftpos competes in an ever-changing, dynamic environment against a number of payment systems, with the aim of becoming Australia’s payment choice by making life easier and being centre of the digital ecosystem. Mr Benton spoke to The Australian Business Executive recently to explain how eftpos works, the company’s fresh approach to the digital landscape, and how it is helping ‘Team Australia’ kickstart the economy during the Covid-19 pandemic.
A household name
“A lot of people know the name eftpos, but they don’t really know who we are,” Mr Benton explains. “We’re not the terminal that’s at your shop. We’re actually Australia’s only debit card payments company.”
The company processes over 2 billion debit card transactions a year, from over 40 million card holders, as shop purchases happen in real time. The company is, in essence, running critical national infrastructure that helps businesses and customers transact.
“We are the local source for innovation, and we drive competition that’s good for the country and good for the economy. We’re in fact a local alternative to the international card schemes that provides consumers, retailers, Fintechs, and banks all with innovative ways to pay. Most importantly, we’re good for Australia, because we’re not driven by profit.”
The company’s main purpose is to make payments better for Australians, but equally important is that eftpos is owned and operated in Australia, which is for the good of the whole country rather than a selection of international shareholders.
“Almost every debit card in this country has got eftpos as a logo at the front or the back, so therefore the transaction does or can run across the eftpos payment system. In the past, when people used to dip their card, before they tapped it, people would choose CHQ or SAV and those would always go across the eftpos system.”
Even now that cards are tapped rather than inserted, merchants can choose to configure their terminals so that digital transactions can go through eftpos. There are clear advantages for both consumers and merchants when using eftpos.
“We real time through consumers, it’s less likely that a consumer will be surcharged, you can get cash at many locations across the country, we keep the transactions processed in Australia, and we are the lowest fraud level network in the country, so we’re very safe and very secure.”
Of equal importance is that the service is low cost for merchants. The benefits that exist at point of sale are now being rolled out into the digital world, ensuring payments competition and choice in these growing areas of the Australian economy.
Kickstarting the economy
The current Covid-19 pandemic has already had a significant impact on eftpos as a business, as it has been focused on initiatives that align with government and industry efforts to get the Australian economy back on its feet, particularly in the recovery phase.
“What we’ve decided to do is cut our wholesale fees from the first of July, and this can be a big impact for small businesses and retailers, and is linked to something called Least Cost Routing [LCR]. So, when a merchant chooses to send us the transaction, we can give them even higher savings than in the past.”
LCR refers to the ability for a merchant to send the card transaction over eftpos infrastructure. Data from the Reserve Bank of Australia (RBA) shows that eftpos is around half the cost of Visa and Mastercard, so a merchant can realise material savings this way.
“We also have the view that, if costs are higher, those costs eventually are passed onto consumers. So there is consumer benefit here as well. The Reserve Bank has encouraged Least Cost Routing for quite a number of years, and encouraged banks to provide these services to their merchants, so that their merchant can get the lowest cost.”
These fee changes have the potential to further amplify cost savings, particularly for small business merchants, who are able to get back on track during these trying times and employ more Australians.
“We see that as doing our part to get the economy back on track,” Mr Benton says. “We’re really encouraging the banks to pass these on to the merchants, and to make sure the merchants get all the savings they can at this time.”
There have been some big changes at eftpos over the past two years, which have seen the business grow and embark on a strategy designed to fundamentally transform the company into a digital player, not just in payments but in other parts of the value chain.
“We’re working across a lot of industries to deliver what we call eftpos Digital Identity solution, and that’s a way that will change how Australians do things in the future in the digital world. We’re really excited about this new tool, and we think it will really help Australians make their lives easier and more secure going forward.”
In simple terms, eftpos can use its network and the authentication process that already exist in people’s bank accounts to enable them to identify themselves, whether it be online or in the physical world, with their consent and with absolute security.
“The things that could impact people’s day-to-day lives with our solution include reducing the impact of fraud, which is about $500m simply in card fraud; protecting identities, to guard against identity theft; smoother onboarding experience, for example opening an account or accessing government services; assisting business to meet their regulatory needs; and of course protecting data, making sure personal data stays onshore in a secure way.”
With this significant shift in focus towards digital and the future, Mr Benton recognises that the eftpos brand must adapt to reflect its place as a hub for innovators developing digital payment solutions that solve the big consumer and merchant problems, both those today and ones coming tomorrow.
The Digital Identity solution is a good example of this new approach, and so the company felt it made sense to transform the brand to be more digital as well. After going through this process, it became clear that the motivating brand mission is the same, and that’s about being good for Australia.
“We believe that we are good for Australian consumers, we are good for Australian businesses, and we’re good for the Australian economy,” Mr Benton says. “And that’s what the brand will evolve through to become far more clearly.”
This mission feeds in to the company’s approach during this unprecedented time of unrest for the global economy, during which it is committed to pitching in and helping the country get back to full economic strength.
“We are doing what we can to get Australians and Australian businesses back in this important time, and we’re very proud to be part of the solution to bring the economy back to its feet, and to be part of what we call ‘Team Australia’.”
With its move into the digital world and a commitment to help rejuvenate the Australian economy, eftpos continues to serve as a vital national resource. Find out more about eftpos by visiting www.eftposaustralia.com.au.