EFTPOS

For general eftpos based systems, see Debit Card.

EFTPOS (pronounced /ˈɛftpɒs/ — electronic funds transfer at point of sale) is the general term used for debit card based systems used for processing transactions through terminals at points of sale. In Australia and New Zealand it is also the brand name of the specific system used for such payments. The Australian and New Zealand systems are country specific and do not interconnect.

Australia

Main article: Debit card#Australia

EFTPOS is an Australian system for processing payment card transactions at “points of sale” via an EFTPOS terminal and at ATMs. Not all merchants provide EFTPOS facilities, but those who wish to accept EFTPOS payments must enter an agreement with one of the seven merchant service providers, which rent an EFTPOS terminal to the merchant. The EFTPOS system in Australia is managed by eftpos Payments Australia Ltd. For credit cards to be accepted by a merchant a separate agreement must be entered into with each credit card company.

Debit cards

Australian banks offer its customers debit cards. A card merely provides the means by which a customer's linked bank accounts can be accessed using an EFTPOS terminal or ATM. Each Australian bank has given a different name to its debit cards, such as:

• Commonwealth Bank of Australia: Keycard
• Westpac Banking Corporation: Handycard
• National Australia Bank: FlexiCard
• ANZ Bank: Access card
• Bendigo Bank: Cashcard

Those merchants that enter the EFTPOS payment system must accept debit cards issued by any Australian bank, and some also accept various credit cards and other cards. Some merchants set minimum transaction amounts for EFTPOS transactions, which can be different for debit and credit card transactions.

A feature of a debit card is that an EFTPOS transaction will only be accepted if there is an available credit balance in the bank cheque or savings account linked to the card.

Australian debit cards normally cannot be used outside Australa. They can only be used outside Australia if they carry the MasterCard/Maestro/Cirrus or Visa/Plus or other similar logos, indicating that they are linked to those transaction systems. Similarly, non-Australian debit and credit cards can only be used at Australan EFTPOS terminals or ATMs if they have these logos or the MasterCard or Visa logos. Diners Club and/or American Express cards will be accepted only if the merchant has an agreement with those card companies. The Discover card is not accepted in Australia. The EFTPOS system is not available for non-bank or non-credit card based transactions, so that store cards and proprietor cards, such as Fleetcard and Motorcard, cannot be processed using an EFTPOS terminal.

Bank-issued credit cards

Australian banks also offer their customers credit cards, which are linked to accounts maintained by the credit card company. When issued through a bank, these cards may also act as debit cards by being associated with one or more linked personal accounts. The customer would indicate which account is to be accessed (debited) by pressing one of three account buttons on the EFTPOS terminal or ATM. The buttons are CHQ, SAV and CR. These historically denoted cheque, savings and credit account, but no longer need be linked to those specific account types.^{[citation needed]} In addition, credit card companies issue prepaid cards which act like generic gift cards, which are anonymous and not linked to any bank accounts. These cards are accepted by merchants who accept credit cards and are processed through the EFTPOS terminal in the same way as credit cards.

Cash out

A number of merchants permit customers using a debit card to withdraw cash as part of the EFTPOS transaction. In Australia, this facility (known as debit card cashback in many other countries) is known as "cash out". For the merchant, cash out is a way of reducing their net cash takings, saving on banking of cash. There is no additional cost to the merchant in providing cash out because banks charge a merchant a debit card transaction fee per EFTPOS transaction, and not on the transaction value. Cash out is a facility provided by the merchant, and not the bank, so the merchant can limit or vary how much cash can be withdrawn at a time, or suspend the facility at any time. When available, cash out is convenient for the customer, who can bypass having to visit a bank branch or ATM. Cash out is also cheaper for the customer, since only one bank transaction is involved. For people in some remote areas, cash out may be the only way they can withdraw cash from their personal accounts. However, most merchants who provide the facility set a relatively low limit on cash out, generally $50, and some also charge for the service. Cash out is not available for credit cards because the merchant is charged a percentage commission on credit card transactions based on the value, and also because cash withdrawals on credit cards are treated differently to purchase transactions, unless the merchant treats the cash withdrawal as an ordinary credit card transaction.

Customer verification

EFTPOS transactions involving a debit, credit or prepaid card can be authenticated by printing and signing a receipt; the merchant verifies the signature on the receipt against the signature on the card. However, as of May 2011 financial institutions are in the process of rolling out smart cards with integrated circuits ("chips") that will enable verification by entering a personal identification number (PIN) at the EFTPOS terminal. At ATMs, only PIN verification is available, and all new credit cards are now issued with PINs regardless of whether or not they have a chip. As a further security measure, if a user enters an incorrect PIN three times, the card may be locked out of EFTPOS and require reactivation over the phone or at a branch. In the case of an ATM, the card will not be returned, and the cardholder will need to visit the branch to retrieve the card, or request a new card to be issued.

PayPass and payWave

In 2006 Commonwealth Bank and MasterCard ran a six-month trial of the contactless smart card system PayPass in Sydney and Wollongong, supplementing the traditional EFTPOS swipe or chip system. The system was subsequently rolled out across Australia in 2009; other systems being rolled out are Westpac Bank's MasterCard PayPass and Visa payWave branded cards. These operate as part of a normal debit card and can be used where the merchant displays the PayPass or payWave logo. These cards contain a special chip and RFID antennae embedded in the plastic. To pay using this system, the customer passes the card within 4 cm of a reader at a merchant checkout. Using this method, the customer does not need to authenticate his or her identity by PIN entry or signature, as on a regular machine. However, these transactions are limited to $100, and some stores have a lower limit. The banks have unilaterally incorporated the MasterCard PayPass and Visa payWave technology into new cards, and it cannot be deactivated by the cardholder. Some merchants do not offer a cardholder the option of signing or entering a PIN when the transaction is below their threshold amount.

History

The name and logo for EFTPOS in Australia were originally owned by the National Australia Bank and were trade marks from 1986 until 1991.

In April 2009, a company, “EFTPOS Payments Australia Ltd”, was formed to manage and promote the EFTPOS system in Australia. The initial members of EFTPOS Payments Australia Ltd were:

• Australia and New Zealand Banking Group
• Australian Settlements Limited
• Bank of Queensland
• Bendigo and Adelaide Bank
• Cashcard
• Citigroup
• Commonwealth Bank of Australia
• Coles Group (now Wesfarmers)
• Cuscal
• Indue
• National Australia Bank
• Suncorp-Metway
• Westpac Banking Corporation
• Woolworths Limited

Usage

As of December 2010, there were over 707,000 EFTPOS terminals in Australia and over 28,000 ATMs. Of the EFTPOS terminals, over 60,000 offered cash withdrawals. In 2010, 183 million transactions, worth A$12 billion, were made using Australian EFTPOS terminals per month.

Network

The EFT network in Australia is made up of seven proprietary networks in which peers have interchange agreements, making an effective single network. A merchant who wishes to accept EFTPOS payments must enter an agreement with one of the seven merchant service providers, which rent the terminal to the merchant. All the merchant's EFTPOS transactions are processed through one of these gateways. Some of these peers are:

• Australia and New Zealand Banking Group
• Commonwealth Bank of Australia
• Cuscal
• FDI (Cashcard)
• National Australia Bank
• Westpac Banking Corporation
• Other

Other organisations may have peering agreements with the one or more of the central peers.

The network uses the AS 2805 protocol.

New Zealand

Main article: Debit card#New_Zealand

Eftpos is highly popular in New Zealand. The system is operated by two providers, Paymark Limited (formerly Electronic Transaction Services Limited) which processes 75% of all electronic transactions in New Zealand, and EFTPOS NZ. Although the term eftpos is popularly used to describe the system, EFTPOS is a trademark of EFTPOS NZ the smaller of the two providers. Both providers run an interconnected financial network that allows the processing of not only of debit cards at point of sale terminals but also credit cards and charge cards.

History

The Bank of New Zealand introduced EFTPOS to New Zealand in 1985 through a pilot scheme with petrol stations.

In 1989 the system was officially launched and two providers owned by the major banks now run the system. The largest of the two providers, Paymark Limited (formerly Electronic Transaction Services Limited) is owned equally by ASB Bank, Westpac, Bank of New Zealand and ANZ National Bank. The second is operated by EFTPOS NZ which is fully owned by ANZ National Bank.

During July 2006 the five billionth EFTPOS payment flowed across the Paymark EFTPOS network since the electronic form of payment was introduced in New Zealand in 1989.

Usage

EFTPOS is highly popular in New Zealand, and being used for about 60% of all retail transactions. In 2009, there were 200 EFTPOS transactions per person.

See also

• Debit Card

External links

• eftpos Official website