Chip and PIN, contactless coming for EFTPOS
While electronic funds transfers haven't changed much since they were introduced 26 years ago, EFTPOS has recognised that technology is at the point where it must transform in order to provide consumers and merchants with another choice.
Speaking at Bank Tech 2012 in Sydney today, EFTPOS managing director Bruce Mansfield said that the company is looking into expanding the technology it uses. It has completed the first phase of transitioning to EMV (Europay, MasterCard, VISA) chip technology, and expects to finish the second-phase pilot by the end of the year.
Mansfield said that during the pilot, concerns were raised to ensure that contactless options were introduced to give consumers and merchants a choice, and to ensure that this method of payment was not limited solely to competitors.
As a result, Mansfield said that contactless payment is now set to follow EFTPOS' EMV implementation shortly after it is rolled out in 2013-14.
Mansfield said that EFTPOS is also examining ways of tapping into card-not-present (CNP) payments. According to him, EFTPOS enjoys a relatively low level of fraud — about AU$10 million annually — since it does not offer CNP payments, but he said that the company has also recognised that there is the potential to offer a method of online payments domestically.
At the moment, EFTPOS has identified that about 75 per cent of Australian online purchases are from Australian businesses, representing a significant market for EFTPOS to enter. This would also simplify the process of tracking fraud, since a common tactic for scammers is to jump jurisdictions to complicate matters for law-enforcement organisations.
Mansfield did not completely rule out the possibility of international online payments.
"Our focus and priority will remain to be domestic payments — serving the needs of Australian consumers and merchants — but, of course, there is a need to consider what we need to do internationally."
He said that this could be done if EFTPOS were to partner with an international organisation, and that it has already received interest from several organisations willing to work with EFTPOS to do so.
Mansfield also addressed the recent news that the Commonwealth Bank has released new mobile point-of-sale devices, giving the device overwhelming support.
"The thing that pleased me the most ... was that that device sensibly met the needs of both today and tomorrow's consumer and merchant. It supported magstripe with PIN: tick; EFTPOS [supports it]. It supported chip with PIN: tick; EFTPOS [will support it] when we roll out EMV. It supported contactless: tick; it'll be a future enhancement."
Mansfield said that while the industry is already upgrading point-of-sale devices to include contactless receivers, the Commonwealth Bank had gone one step further by introducing new technology at the same time.
"CBA came along yesterday and said, 'Well that's good, we have one of those, but here's what we think the future holds: tablet-based payments'," he said.