We don’t often think about EFTPOS – it’s the quiet, low-cost payment option that lives in almost every New Zealander’s wallet. It’s been 30 years since Kiwi consumers made our first one million EFTPOS transactions in 1989, but since then we’ve taken to it with more enthusiasm than any other nation. Today Paymark processes 1.6 billion EFTPOS transactions each year: 325 transactions per person and 150 purchases per second.

Because EFTPOS works so seamlessly in modern life, it’s easy to forget just what a revolution it represented 30 years ago. Before its arrival, you always needed to have some cash handy and your chequebook at the ready. You spent a lot more time queuing in banks and at ATMs. And when you lost your cash, you never saw it again. It was also tough on small business owners. Retailers had the security worries of holding and moving large sums of cash as well as dealing with bounced cheques. There was no online shopping, it was almost a decade before online banking was launched, and parking meters only accepted coins.

Getting used to the idea of digital payments

EFTPOS was the system that introduced us all to the concept of digital payments; it wasn’t until the late 1990s that internet banking first hit our shores. Although credit cards were already in use, their fees were high enough that most merchants refused to accept them for low-value transactions (and many still do). For Kiwis accustomed to spending and receiving cash, EFTPOS seemed suspiciously simple – almost dangerously straightforward. Shoppers worried that someone else could get hold of their card and drain their account, while retailers weren’t convinced the EFTPOS system would always deliver their money.

However, once we began using it, it didn’t take long for EFTPOS to become established as the preferred way to pay, with its secure and instant debit transactions. Customers loved the convenience and merchants loved the low-cost fee structure.

There are now over 85,000 merchants with more than 170,000 EFTPOS terminals across New Zealand, and you’ll struggle to find any retailer who doesn’t accept and prefer payment by EFTPOS. We use EFTPOS not only to pay for our daily coffee, but also for groceries, electronics and even cars. Modern terminals mean you can even pay by EFTPOS at farmer’s markets, school fairs and all those other places where cash was once an imperative. New Zealand now has the lowest amount of cash in circulation in the world.

Saving New Zealand’s economy $6 billion last year

Can you imagine a world without EFTPOS, where we still paid with cash and cheques? It would add a massive layer of inconvenience and expense to our day-to-day lives, not to mention New Zealand’s economy as a whole. More Kiwis would be living on credit, rather than debit, potentially adding more high-interest personal debt to our economy.

Research from the Retailers Association suggests if EFTPOS were to vanish the cost to the economy would be an added 2% to GDP - and with a current GDP of $300 billion, retailers and consumers would have paid an additional $6 billion in direct and indirect transaction costs last year. The bank fees paid by merchants could potentially lead to higher retail margins, adding to the cost of living for every Kiwi household. In addition, electronic payments ensure we don’t wriggle out of paying GST, so New Zealand Inc collects more money to spend on building a stronger nation.

The future of EFTPOS  

By continuing to use EFTPOS, New Zealanders keep their transaction costs lower and keep more of their own money in their pockets by avoiding credit card surcharges. New technology like Online EFTPOS allow Kiwis to shop online with their EFTPOS card, while open banking is paving the way for the next generation of low-fee EFTPOS payment systems.

For Kiwis who want to spend their own money, reduce their reliance on credit, and avoid fees, EFTPOS has been the perfect solution for 30 years – and it remains one of New Zealand’s most life-changing everyday innovations.