Open Payments in New Zealand
EFTPOS arrived in New Zealand in about 1984. First, we get cards so we could get money out of ATMs but only a year or so later, BNZ set up a process where shoppers at a petrol station chain could swipe their “bank cards” through a “terminal” and pay without having to carry cash.
EFTPOS became part of the fabric of New Zealand and we took to it like no other country in the world. Partly that was because retailers were so happy to have it on their counters. EFTPOS meant no security concerns as they had with cash, and no chasing bad debts as with cheques that bounced (kids, ask your parents). When you add in no transaction fees, as most countries introduced, suddenly EFTPOS became as good if not better than cash and retailers encouraged shoppers to “put it on the plastic”.
From there, New Zealand became the world leader in terms of uptake of electronic payments. Money flowed without cash transfers. Banks saw the value in making sure transfers went through as quickly as possible and shoppers could buy something in one store and know that by the time they were buying at the next store, their account balance would be accurately updated.
But of course, technology doesn’t stand still, and today, the market for payments is quite different.
Today we have credit cards and debit cards. We have chip and PIN and we have contactless cards. We can pay with the wave of a phone, sometimes, and we can pay with our watches, sort of. It’s all become quite different and quite polarizing and the original model of one card for use in multiple locations has been somewhat lost.
Because of the variety of cards and the fees associated with some of them, you’re never quite sure what card you can use in the shops you’re in, as some retailers say they won’t accept certain payment types.
And that’s just on the payment side of the fence. Retail itself has undergone a dramatic transformation in the last two decades courtesy of the internet.
Now we can shop in store, we can shop online and increasingly we can shop online while we’re out and about. Mobile commerce is changing the way we shop and our payment mechanisms haven’t really kept up. While many online retailers have mobile apps to help with the shopping, for smaller operators that’s just too costly, so they still rely on their websites and hope the customer has a credit card. That means potentially they’re missing out on mobile shoppers or on those shoppers who, for whatever reason, don’t want to use a credit card. For some, remembering those 16-digit numbers is too much, and of course some customers simply don’t have credit cards. That means they’ve missed out on a world of opportunity with online shopping.
At Paymark we worked closely with the banks and listened to our customers to develop a way for consumers to use their own money when shopping online, a way that works with the investments the banks have made in their own apps. So, see a product on a retail site, click on the Online EFTPOS button and your banking app will handle the payment. No need to remember your card number, or even have your card with you, just punch in your mobile phone number and hey presto, a one click confirmation request arrives in your secure banking app. Easy.
And that’s the future we see for digital payments. We’re moving to a post-plastic world, one where we can cheerfully leave our wallets behind and just take our phones with us into the world of retail. We want to break down those silos, rip those “do not use” stickers off the terminals and open up the shopping experience once again.
It’s called the Open Payments Platform (OPP or OPEN) and it means banks and retailers can design new ways to move money about that make it easier for customers to do business. It’s about opening the network up to new ideas and new opportunities, like peer-to-peer payments (P2P) for when you’re all arguing over the restaurant bill. Or person-to-business (P2B) payments that allow you to quickly and easily pay the gardener or tradie who’s come to fix the sink. Today, these one-off payments tend to still be done in cash but tomorrow we hope to make it as easy and frictionless as possible.
We should have the ability to control our money and to spend it the way we want. The early days of EFTPOS delivered just that kind of control and now, with the move beyond plastic cards, we hope to give the customer back that ability and above all choice.