Innovating on Australia’s domestic card payments rails

Sometimes the most remarkable innovations are built on foundations that have existed for many years – creating new and compelling propositions for consumers and businesses, and driving flourishing new ventures.

We have seen this time and time again with the internet, where the foundations that were started back in the 1960s continue to inspire some of the most compelling network innovations that drive our economy today.

So too in payments, our emerging FinTech community has huge potential to innovate on top of Australia’s existing card payment rails to create inspiring customer propositions, incorporating multiple layers such as mobile apps, digital identity, data and payments via APIs.

That’s because traditional payment rails built out over more than three decades, across millions of cardholders and hundreds of thousands of merchant locations in store and online, have the capacity to be expanded by innovative thinkers and new technology. 

One only needs to look around to see these types of innovation taking place with the rise of BNPL, Apple Pay, Google Pay and the like, which all operate on existing card payment rails.

As younger generations shift away from the credit card products of their parents’ generation, the card payment platforms themselves remain as prevalent and more popular than ever before.

Debit card platforms are by far the most frequently used means of transacting in the economy and Australians most preferred way to pay, whether that be online, on mobile or in store.

And debit card platforms along with their operational systems provide the potential for FinTechs to use these ubiquitous networks for other purposes such as data products and digital identity solutions to keep people safe in the Digital economy.

FinTechs are only limited by their imagination of what could be possible, in fact card payment rails can be used for other transactions and value exchanges than just payments, for example digital receipts and warranty, and loyalty redemption and offers.

In Australia, we are extremely lucky to have access to robust domestic payments networks like eftpos, providing secure low-cost access for innovations such as Beem It and eftpos’ digital identity solution, connectID. But there is far more potential.

Norway’s Vipps mobile app, demonstrates how one local version can take off as an alternative to global Big Tech. Serving as a great example of innovation flourishing on top of a domestic card network’s rails with support from the local industry, for the benefit of customers.

Australians love of debit cards has transitioned into the mobile environment as people have provisioned their physical cards into mobile apps and use contactless and mobile payments more since COVID-19.

The move to mobile looks set to continue along with the rise of digital wallets and everything they are capable of beyond the payment mechanism, and in store mobile initiated transactions as the most common types of contactless forms of paying.  

Australians are already using digital wallets to pay for everyday expenses, and we recognise the growth opportunities are linked to how the value-added services that wrap around the digitised payment are achieved which is where FinTechs come into their own.

Now is the time to re-imagine the Australian payment experience with FinTech partners, by exploring existing technologies available through mobile devices such as Bluetooth, QR codes and other alternatives, while businesses look to implement new digital innovations to improve efficiency and create better customer experiences.

eftpos is in the process of transitioning from a card present retail business to be a major player at the centre of Australian digital commerce.

Though the eftpos network, FinTechs have the ability to access 51 million Australian eftpos-enabled proprietary, multi-network debit and multi-network credit cards, as well as access to hundreds and thousands of merchants nation-wide. 

eftpos’ expertise as a trusted Australian payments scheme, means that we can seamlessly combine identity and payments transactions within the same flow. Opportunities for deeper integration between payments and identity management processes will create even better customer experiences while reducing opportunities for fraud. 

eftpos’ connectID will be a key component of the new economic infrastructure that will transform the way we manage identity in Australia.

We are transforming the payment experience of tomorrow with a shift from payment transactions to digital customer experiences, supporting the needs of Australian consumers and merchants.

FinTechs are a dynamic and growing sector of our economy, and of crucial importance in the payments space. eftpos is proud to be a market leader in developing digital payments solutions in collaboration with Australian FinTechs.

eftpos is for Australians. Always.

Stephen
30-06-2021
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Influencing and partnering to deliver Australia’s digital future

eftpos General Counsel and Company Secretary Robyn Sanders explains how eftpos innovations and thought leadership collaborations with key stakeholders, are helping deliver Australia’s digital future in step with the Federal Government’s Digital Economy Strategy.

In previous editions of the Networker we have shared our Product Roadmap 2021 Update, which outlined how eftpos aims to drive payments competition and improve consumer experiences in Australia’s fast-growing digital economy.

Last month our CIO Ben Tabell explained how eftpos enables both real time payments for business and consumers across the Australian economy and is a company at the forefront of multiple leading edge initiatives.

With its role as a mutual and the only Australian-owned separately designated payments system, we focus in this edition on how eftpos is actively collaborating with its Members, policy makers and regulators, merchant groups and small businesses to shape Australia’s digital future, fulfilling our purpose to “do good for Australia”.

The recent Federal Budget outlines the policies and actions the Government is taking to make Australia a modern and leading digital economy by 2030.

The Budget outlined several announcements and key investment areas directly relevant to eftpos including the Digital Economy, Digital Identity, review of the Australian payments system, e-invoices, and support for FinTech’s and Digital SME’s, which are also summarised separately in this edition of the Networker.

eftpos is actively making submissions into numerous government and regulatory reviews, issues papers and inquiries that will have significant bearing on how Australia’s digital future is shaped, and the ability of Australia’s businesses to compete with Big Tech.

Mobile Payment and Digital Wallets

The Parliamentary Joint Committee Inquiry into Mobile Payment and Digital Wallet Financial Services focuses in on an area where eftpos can assist the Australian finance sector and broader economy to thrive and grow.

Through a combination of eftpos’ low cost access, mobile payments capability, ability to issue tokens, work with industry on real time digital payments and a ubiquitous Digital Identity solution, there is potential to bring many FinTech solutions to life, particularly in the mobile payments space.

eftpos is wallet agnostic and will work with FinTech’s and other digital partners to offer a fully digitised payments rail that supports a variety of competing digital wallets and other digital applications to encourage further innovation.

Recent figures show significant uptick in digital wallet usage with the likelihood of this becoming the most popular contactless way to pay in-store in less than a year.

Despite the Reserve Bank’s stated objective to enable Least Cost Routing through dual network debit cards in Australia in order to reduce merchant costs, this capability is currently not available for Mobile Point of Sale Payments (mobile), or mobile in app payments. This needs to be addressed as a matter of priority and appears to be a focus for RBA in its preliminary assessment issued 28 May that at least some issuers should be expected to continue to issue dual network debit cards with access to both networks in all relevant form factors (including mobile wallets).

eftpos has invested deeply in the mobile ecosystem, having purchased Beem It which was recently selected to build eftpos' QR code utility. While Beem It is building the infrastructure needed, eftpos continues to remain wallet and partner agnostic, and open to partnering with all FinTech’s.

Payments System and Regulation Reviews

Getting the regulatory architecture right will set Australia up for success in the digital economy for the short term and in years to come.

Substandard regulatory architecture has the potential to stall technologically driven innovation and stymie future competition, efficiencies and enhanced end user outcomes.

The aim of the Treasury Department’s Payments System Review is to ensure that the future regulatory architecture is fit-for-purpose and responsive to advances in payments technology and changes in consumer demand.

The regulatory architecture needs to address gaps, including the need to enshrine competition, choice and transparency as fundamental principles in order to drive better cost of payments outcomes, innovation and productivity benefits.

There is a need for clear rules around multi-network card/account access in all channels and form factors to ensure competition is maintained, and a requirement to make Least Cost Routing available on an opt out basis to ensure that the benefits it brings to Australian small business are realised quickly across all payment channels.

eftpos is currently reviewing the RBA consultation paper on the Review of Retail Payments Regulation released on 28 May, seeking stakeholder views on preliminary conclusions, and plans to respond to the Consultation ahead of the 9 July 2021 deadline.

eftpos believes the RBA has a great opportunity to ensure competition, provide greater transparency and simplicity of pricing for better consumer and merchant outcomes; and correct a trend for international interests to take unregulated positions that are ultimately detrimental to the industry and broader economy.

For example, the RBA had the best interests of the broader community and economy at heart when emphasising the right of merchants to control their cost by using the least cost routing (LCR) rails in 2013 and, although LCR has not yet been as successful as intended, there are various actions outlined by eftpos in its submission response that the RBA could still take to make it work better to achieve the regulatory intent.

FinTechs

As with previous issues papers by the Senate Select Committee on Australia as a Technology and Financial Centre, eftpos will respond to the upcoming third issues paper, which is looking into ways for the FinTech community to gain greater access to the real time payments system.

This issue, along with others has been discussed amongst members of the eftpos Fintech Advisory Committee, with the Committee set to deliver recommendations on how FinTech’s can access and leverage the eftpos payments network for the betterment of Australia’s digital economy.

In summary, eftpos fully understands the importance of its role as an essential part of the national payments infrastructure. We remain committed to providing efficient, cost-effective and market-specific payments solutions for the benefit of all Australians and enhance productivity across the economy.

Robyn Sanders Header Image
28-05-2021
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eftpos hosts FinTech collaboration at Intersekt

This month eftpos hosted one of its recent FinTech collaborations at Intersekt, courtesy of FinTech Australia.

The Intersekt conference in Melbourne is the leading, most thought provoking gathering of Australian FinTechs, hubs, accelerators, policymakers, regulators, investors and advisors, devoted to examining, discussing and unlocking the potential of Australia’s FinTech market.

Key discussions amongst members of the eftpos Fintech Advisory Committee included recommendations on how FinTech’s can access and leverage the eftpos payments network for the betterment of Australia’s digital economy alongside other recommendations.

As with previous issues papers published by the Senate Select Committee on Australia as a Technology and Financial Centre, eftpos will respond to the upcoming third issues paper, which is also looking into ways for the FinTech community to gain greater access to the real time payments system.

During the conference, eftpos’ CIO Ben Tabell took to the stage with Verrency to talk about their partnership, using the eftpos API program for a card-linked offers loyalty solution that provides meaningful value for millions of eftpos enabled cardholders.

The Verrency solution enables loyalty program providers to give cardholders rewards and discounts for making eftpos transactions on around 51 million Australian eftpos-enabled proprietary, multi-network debit and multi-network credit cards at participating merchants.

The eftpos public API program represents a great opportunity for Australian FinTechs to innovate on the eftpos network, with access to hundreds of thousands of merchants across the country.

Collaboration meeting
28-05-2021
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connectID & Retail Drinks Australia trial digital age checks for online alcohol sales

eftpos’ new digital identity solution, connectID, is expanding its trial of a digital age verification process for purchasing alcohol online after a successful initial trial in partnership with Retail Drinks Australia, as announced at today’s Liquor Retail Summit.  

The expanded trial comes ahead of the NSW Government’s legislation that commences in July next year and requires consumers to verify their age before they’re able to purchase alcohol online.

The initial trial involved connectID, global Identity Service Provider Yoti and Sydney based specialist craft beer retailer Beer Cartel supported by technology partner MyIntegrator, to successfully demonstrate end-to-end transactions, with auditable age verification.

The expanded trial will now involve additional online liquor merchants and further Identity Service Providers, including Australia Post.

eftpos’ Entrepreneur in Residence Rob Allen said the trial demonstrates how digital identity technology can lead to the creation of easy to implement ‘industry-led’ solutions that are simple for customers.

“We are excited to be working with Retail Drinks Australia, Yoti and Beer Cartel on this very practical example of how digital identity can make life easier and safer for merchants and consumers, and expanding the trial further with new partners,” Mr Allen said.

This solution makes it simple for consumers to identify themselves, while also helping alcohol merchants meet their compliance obligations.

“connectID is collaboratively working with state governments, industry associations, businesses and online merchants to simplify and manage a range of customer identity needs and requirements, helping solve compliance requirements for many different sorts of businesses,” Mr Allen said.

Retail Drinks Australia CEO Michael Waters said as the peak national industry body for Australia’s retail liquor industry, Retail Drinks and our members are committed to the responsible promotion, sale and supply of alcohol beverage products.

“We’re pleased to be working collaboratively with partners like eftpos and other stakeholders on this ‘industry-first’ age verification pilot for same day online alcohol sale and delivery that seeks to strike the right balance between good regulation and the freedom to retail responsibly,” Mr Waters said. 

Australian Regional Director of Yoti, Darren Pollard said Yoti is delighted to be integrated into the connectID identity exchange which we believe will further support awareness of reusable digital identities in Australia.

“We are excited to participate in this trial to collectively devise an industry-led solution for secure age verification for online alcohol purchases, at both the online point of sale and at delivery which will provide shoppers a secure, safe and quick experience and online retailers a fully compliant solution,” Mr Pollard said.

eftpos began its new digital identity solution, connectID, mid last year, with the aim of making it easier for Australians to share, store and receive personal identity information online.

While connectID securely facilitates the identity verification or data exchange, it does not store the identity data. Identity service providers store consumer identities and take responsibility for providing this secure information only under the consent of the identity owner.

connectID has applied to become the first accredited non-government operator of a digital identity exchange in Australia, as interoperability is key to the connectID solution. It is designed to work within the Federal Government’s Trusted Digital Identity Framework (TDIF) and the industry’s TrustID framework, as well as emerging international standards.

connectID & Retail Drinks Australia trial digital age checks for online alcohol sales
19-05-2021
connectID & Retail Drinks Australia trial digital age checks for online alcohol sales

eftpos to join Intersekt FinTech showcase

eftpos will showcase one of its recent FinTech collaborations at Intersekt next month.

The Intersekt conference in Melbourne is the leading, most thought-provoking gathering of Australian FinTechs, hubs, accelerators, policymakers, regulators, investors and advisors, devoted to examining, discussing and unlocking the potential of Australia’s FinTech market.

During the conference, eftpos’ CIO Ben Tabell will take to the stage with Verrency to talk about their partnership, using the eftpos API program for a card-linked offers loyalty solution that provides meaningful value for millions of eftpos enabled cardholders.

The Verrency solution enables loyalty program providers to give cardholders rewards and discounts for making eftpos transactions on around 51 million Australian eftpos-enabled proprietary, multi-network debit and multi-network credit cards at participating merchants.

The eftpos public API program represents a great opportunity for Australian FinTechs to innovate on the eftpos network, with access to hundreds of thousands of merchants across the country.

Intersekt
29-04-2021
Intersekt

eftpos low cost national QR code payments network rollout

eftpos today announced details for a national QR code payments network rollout, which aims to provide Australian consumers and merchants with better data-rich payments experiences no matter where they choose to shop – online, on their mobile or at the checkout.

eftpos aims to have the QR code payments network in trial by mid-year, designed to be low cost and facilitate many value added opportunities for merchants and consumers. It is intended to seamlessly link loyalty, offers, receipts and more, while also driving deeper customer engagement. The national rollout is expected to be completed in 2022.

eftpos CEO Stephen Benton said the decision to rollout national eftpos QR code payments network comes at a time when Australians are becoming familiar with QR code technology through daily interactions with COVID19 check ins and increasingly turning to digital shopping.

Mr Benton said the rollout was about re-imagining the Australian payment experience, while businesses are looking to new digital innovations to improve efficiency and create better customer experiences.

“Digital transactions enabled through the national QR code payments network aim to elevate and enrich the consumer payment experience while driving growth for local businesses,” Mr Benton said.

“Initiating secure purchase transactions using a consumers’ preferred digital wallet unlocks a wealth of extra benefits that will transform the way Australians choose to pay.”

Mr Benton added as part of eftpos’ strategy driving digital competition in Australia, the technology allows merchants to grow their digital sales with low cost QR acceptance using enriched data and integrated customer loyalty services, by leveraging eftpos’ robust and secure Australian owned network infrastructure.

It works by generating unique QR codes containing transaction details that are captured on a consumer’s mobile phone, initiating a secure digital wallet payment that is seamlessly integrated with the merchant’s loyalty service provider.

“The QR code payments network will enable local home-grown innovation by connecting numerous APIs, consumer digital wallets, and supporting technologies on top of the existing eftpos network rails, providing choice and potential cost savings for local businesses,” Mr Benton said.

eftpos QR network
25-02-2021
QR code on phone and laptop

Australia’s eftpos joins Hedera Governing Council

eftpos today announced it has joined the Hedera Governing Council and will run the country’s first Hedera network node this year.

Designed to be the most decentralised governance model for a public ledger, the Hedera Governing Council includes a group of highly diversified enterprises and organisations overseeing a global network of nodes that aims, among other things, to enable low cost micropayments for a range of use cases such as the Internet of Things (IOT) and access to content streamed over the internet.

eftpos CEO, Stephen Benton, said eftpos joined the Council after a number of successful proofs of concept last year, and it aimed to enhance the company’s digital payments innovation strategy to better meet Australians’ payment needs into the future.

“By joining the Hedera Governing Council and running the Australian node, alongside some of the world’s largest and most influential companies, we are excited to participate in the development of next-generation micropayments technology that has the potential to open up entirely new ways of conducting business for Australian enterprises and enable compelling new experiences for Australian consumers.

“For example, in a world of fast paced technology change, low cost micropayments to pay for internet content or tiny payments for device to device transactions.”

The eftpos digital strategy was devised with an Australian focus, creating world-class innovations to compete with global payments players. The digital strategy has five key elements:

  • Mobile Wallets including Beem It
  • eCommerce Digital identity, using connectID
  • Fintech ecosystem access National QR code payments rollout.

The initial objective of the micropayments proof of concepts, led by eftpos Entrepreneur in Residence, Rob Allen, was to investigate ways to create a seamless, sub-cent micropayments experience as an alternative to traditional online paywalls and subscriptions in the digital world.

“By combining the new eftpos API infrastructure with a consumer wallet-based experience, digital identity, and an AUD-based stablecoin using Hedera’s superfast, secure and low-cost distributed network, the PoC’s objective was demonstrably achieved,” Mr Allen said.

“Use cases like this simply are not possible on other public blockchains. Along with several partners, we are now exploring a variety of use cases that this combination of technologies enables and the options to commercialise them.

“Being on the Hedera Governing Council will provide us with the combined technical insight of all the Council members as well as a unique global perspective to improve our speed to market.”

Mance Harmon, CEO and co-founder of Hedera Hashgraph, said, “As Australia’s debit card system operator, eftpos is a critical component of the country’s financial infrastructure, processing over 2 billion transactions in 2020 worth an average of more than $300 million each day. We are pleased that they have joined the Hedera Governing Council as part of their new Australia-first digital product strategy. We look forward to their collaboration with other Council members and participants of the Hedera ecosystem to help make micropayments and other innovative financial models a reality for millions of consumers and billions of IOT devices.”

As the 17th Council member, eftpos joins a growing network of large enterprises, including Avery Dennison, Boeing, Dentons, Deutsche Telekom, DLA Piper, FIS (WorldPay), Google, IBM, LG Electronics, Magalu, Nomura, Swirlds, Tata Communications, University College London (UCL), Wipro, and Zain Group.

Members of the Hedera Governing Council are responsible for running the initial nodes of the Hedera network, as well as guiding both strategy and software development, over a maximum of two consecutive three-year terms.

This contributes to stability and is conducive to maintaining diversity and decentralisation of the public network. Hedera Hashgraph’s node policy and codebase are undergoing continuous updates, to which Council members will contribute, supporting a governance model that eliminates the risk of forks, provides safeguards for users, and preserve the integrity of the Hedera network.

For more information, visit https://hedera.com/council.

About Hedera

Hedera Hashgraph is a decentralised public network on which developers can build secure, fair applications with near real-time finality. The platform is owned and governed by a council of the world’s leading organisations including Avery Dennison, Boeing, Dentons, Deutsche Telekom, DLA Piper, eftpos, FIS (WorldPay), Google, IBM, LG Electronics, Magalu, Nomura, Swirlds, Tata Communications, University College London (UCL), Wipro, and Zain Group.

For more information, visit www.hedera.com, or follow us on Twitter at @hashgraph, Telegram at t.me/hederahashgraph, or Discord at www.hedera.com/discord. The Hedera whitepaper can be found at www.hedera.com/whitepaper.

Hedera
28-01-2021
Hedra