Industry Insight: Innovating on Australia’s domestic card payments

17/06/21: AFR

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.

Stephen Benton, CEO of eftpos Australia. 

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 buy now pay later, 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.

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.

Through the eftpos network, fintechs currently have the ability to access 51 million Australian eftpos-enabled proprietary, multi-network debit and multi-network credit cards, as well as gain access to hundreds and thousands of merchants nationwide.

To ensure these opportunities are optimised for fintechs, eftpos established the eftpos Fintech Advisory Committee in partnership with FinTech Australia earlier this year, featuring 10 well-known fintech companies. The committee is working through a number of issues and opportunities about how to best leverage the network and will publish its first report and recommendations in the next month.

The expertise of eftpos 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.

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.