Will EFTPOS be able to survive in the online world?
The major banks have devised a plan to reinvigorate EFTPOS. The plan was to establish a commercial entity to run and promote EFTPOS. Like Bankcard, which was scrapped at the start of 2007, EFTPOS has been withering despite an overall growth in the use of debit cards. In October 2009 the M@MBO project developed by BPAY was still to get off the ground, (see chapter 3, for more information).
A greater share of debit growth has been going to MasterCard, Visa and prepaid debit cards, and payment trends suggest a death spiral for EFTPOS is a possibility.
Payments data company MWE Consulting indicated in early 2008 that debit card usage in Australia was half that in the UK and two-thirds that in New Zealand.
Frequently mentioned as a drawback for EFTPOS is an absence of online and international capability, although one of the attractions was its lower costs and very low fraud.
The grand plan faces an immediate challenge as the banks failed to bring on board two of EFTPOS’ biggest stakeholders retailers Woolworths and Coles, at the earliest stages of planning.
According to MWE the share of card spending on debit fell against credit in the 1990s to below 30% but has been recovering since 2001 and is now around 32% of spending.
The future of EFTPOS is further complicated by the competing agendas of the banks and merchants. EFTPOS is cheaper for merchants and provides revenue for the major retailers while the international cards are more profitable for the banks.
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