First banks, retailers jump on eftpos' digital payments offering

eftpos has begun processing the first online payments through its new digital payments solution, offering businesses an affordable alternative to global credit card schemes.

In a move that promises to bring least-cost routing to the digital realm, the Australian-made electronic payments provider began rolling out the solution to banks and major retailers.

It is the latest play by the company to challenge the transaction routing costs of Mastercard and Visa, and comes at a time when the COVID-19 pandemic is continuing to force businesses and transactions online.

In July, eftpos halved its interchange fee to just two cents, strengthening the case for banks to more heavily promote least-cost routing, which has been opposed by Mastercard and Visa.

The digital payments solution will initially be available for regular payments, or “online card-on-file transactions”, where a card is stored by the business or their payment system provider.

eftpos CEO Stephen Benton on Monday said almost 40 Australian banks, including Suncorp, were already supporting the service, meaning their cards will be able to be processed by eftpos.

In addition to recurring payments initiated by the merchant such as monthly subscriptions, some banks are also supporting “payments initiated by the customer”.

Dozens of businesses, including Aussie Broadband, are also already using the digital service for eftpos card-on-file payments, with more expected to join as the service expands.

“It is early days but the service will increasingly enable more small and medium businesses to have Australia’s most popular cards – multi-network debit cards – processed by eftpos, and potentially deliver significant cost savings,” he said.

“These potential savings are particularly important for small businesses during COVID-19 and recovery.

“I urge small businesses that use card on file payments to talk to their digital payments providers about switching on the service.”

Aussie Broadband managing director Phillip Britt said the telco was very excited to switch on the digital payments solution and believes it “could help Australian businesses reduce costs”.

eftpos’ push into digital payments comes as it also attempts to break into the digital identity space with its new connectID solution.

The solution, which is currently being trialled with Australia Post, acts as a broker between identity providers to allow merchants or government agencies to verify identity.