Bank Charges for Paywave

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Ultimate Geek

#2517874 6-Jul-2020 10:55

The game changer that is imminent is open banking APIs. Paymark are developing a new version of online eftpos which will work using a text message/push notification at the point of sale. All banks have to make the APIs available unlike the first gen online eftpos which wasnt mandatory for banks. This has the potential to wipe out the contactless debit market over the next 1-2 years. Also look for large retailers to build their own software into their POS systems. To make a payment you will simply give them your mobile number.

Kyanar

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#2517884 6-Jul-2020 11:20

MileHighKiwi: The game changer that is imminent is open banking APIs. Paymark are developing a new version of online eftpos which will work using a text message/push notification at the point of sale. All banks have to make the APIs available unlike the first gen online eftpos which wasnt mandatory for banks. This has the potential to wipe out the contactless debit market over the next 1-2 years. Also look for large retailers to build their own software into their POS systems. To make a payment you will simply give them your mobile number.

Paymark's OPEN looks positively awesome, the downside is that there is still also EFTPOS NZ who switch transactions so until they go away or dump EFTPOS entirely, it's not going to have the penetration needed to match the ubiquity of advanced eftpos capabilities like Australia.

One thing I did think that was interesting about Paymark's Online EFTPOS is that it is not free for retailers - Paymark quotes that it will cost "roughly 1%", reflecting the reality that a free to use network simply isn't sustainable, someone has to pay for it. Getting used to EFTPOS actually costing money is going to be a bit of a paradigm shift for your average small business, and some of them may simply decide they won't touch any of these new innovations, leaving NZ stuck with a hodge-podge of retailers only supporting archaic EFTPOS, retailers supporting Online EFTPOS only online, retailers supporting he full gamut of functionality, etc.

Also, at 1%, Online EFTPOS is more expensive than Interchange+ scheme debit. At this stage, I see zero probability of it wiping anything out.

Mahon

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Ultimate Geek

#2517916 6-Jul-2020 12:51

1% of retail sales in NZ is quite a massive figure.

MileHighKiwi

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Ultimate Geek

#2518189 6-Jul-2020 20:06

Kyanar:
MileHighKiwi: The game changer that is imminent is open banking APIs. Paymark are developing a new version of online eftpos which will work using a text message/push notification at the point of sale. All banks have to make the APIs available unlike the first gen online eftpos which wasnt mandatory for banks. This has the potential to wipe out the contactless debit market over the next 1-2 years. Also look for large retailers to build their own software into their POS systems. To make a payment you will simply give them your mobile number.

Paymark's OPEN looks positively awesome, the downside is that there is still also EFTPOS NZ who switch transactions so until they go away or dump EFTPOS entirely, it's not going to have the penetration needed to match the ubiquity of advanced eftpos capabilities like Australia.

One thing I did think that was interesting about Paymark's Online EFTPOS is that it is not free for retailers - Paymark quotes that it will cost "roughly 1%", reflecting the reality that a free to use network simply isn't sustainable, someone has to pay for it. Getting used to EFTPOS actually costing money is going to be a bit of a paradigm shift for your average small business, and some of them may simply decide they won't touch any of these new innovations, leaving NZ stuck with a hodge-podge of retailers only supporting archaic EFTPOS, retailers supporting Online EFTPOS only online, retailers supporting he full gamut of functionality, etc.

Also, at 1%, Online EFTPOS is more expensive than Interchange+ scheme debit. At this stage, I see zero probability of it wiping anything out.

Interesting. So I was under the impression that there cant be any charges to use the APIs. If Paymark are going to charge 1% look for the card schemes to reduce the interchange on scheme debit to counter it.

coffeebaron

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#2518322 7-Jul-2020 09:24

Is there anyway for a merchant to only accept PayWave on VISA Debit only? That way they can have the cheap debit card rate and not need to worry about the higher credit card rate. I'm sure that would help with uptake.

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Handsomedan

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#2518338 7-Jul-2020 09:57

coffeebaron: Is there anyway for a merchant to only accept PayWave on VISA Debit only? That way they can have the cheap debit card rate and not need to worry about the higher credit card rate. I'm sure that would help with uptake.

I'm not sure anyone has that capability as yet, but it certainly seems a sound concept.

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Kyanar

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#2518442 7-Jul-2020 11:43

coffeebaron: Is there anyway for a merchant to only accept PayWave on VISA Debit only? That way they can have the cheap debit card rate and not need to worry about the higher credit card rate. I'm sure that would help with uptake.

No. Merchant agreements have an "accept all cards" mandate, merchants may not choose which types of cards (within a brand) they accept.

RunningMan

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#2534212 4-Aug-2020 06:37

Apparently, contactless interchange fees are being reduced. https://www.tvnz.co.nz/one-news/new-zealand/hopes-contactless-payments-become-more-widespread-transaction-fees-slashed

Visa is reducing its interchange rates for contactless debit and credit payments from August 15, while Mastercard's changes took effect on Saturday.

In the wake of the announcement, Westpac today announced it's lowering its merchant fees for small and medium businesses, facing a new maximum rate of 0.60 per cent on contactless debit transactions.

sbiddle

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#2534224 4-Aug-2020 08:08

Small drops from Visa https://www.visa.co.nz/about-visa/interchange.html

What's interesting is that Kiwibank say most of their customers are on Interchange+ pricing now. This surprises me as one of the problems many who complain about pricing have is that they are on blended pricing (ie you're paying the same fee for every card type) rather than non blended or interchange+ pricing plans.

One thing of interest as well that media don't seem to have picked up on is that Paymark are putting their EFTPOS fees up by nearly 30% next month.

Handsomedan

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#2534254 4-Aug-2020 09:23

sbiddle:

Small drops from Visa https://www.visa.co.nz/about-visa/interchange.html

What's interesting is that Kiwibank say most of their customers are on Interchange+ pricing now. This surprises me as one of the problems many who complain about pricing have is that they are on blended pricing (ie you're paying the same fee for every card type) rather than non blended or interchange+ pricing plans.

One thing of interest as well that media don't seem to have picked up on is that Paymark are putting their EFTPOS fees up by nearly 30% next month.

Kiwibank have such a small merchant book compared to the big 4 banks that the complaints about blended rates will persist for some time yet.

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pom532

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#2534275 4-Aug-2020 09:54

Is it still expensive for the company if I use visa debit contactless?

sbiddle

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#2534334 4-Aug-2020 11:15

pom532:

Is it still expensive for the company if I use visa debit contactless?

Depends.

If they're a merchant on a blended plan and pay the same rate for all card types, yes. If they're non blended it's cheaper than a normal credit card.

Many retailers are still on blended plans.

pom532

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#2534456 4-Aug-2020 11:57

sbiddle:

pom532:

Is it still expensive for the company if I use visa debit contactless?

Depends.

If they're a merchant on a blended plan and pay the same rate for all card types, yes. If they're non blended it's cheaper than a normal credit card.

Many retailers are still on blended plans.

Thanks. But it is still cheaper to insert the card right?

Handsomedan

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#2534475 4-Aug-2020 12:31

pom532:

Thanks. But it is still cheaper to insert the card right?

A debit card used in dip or swipe via a terminal will be free for the retailer - it's processed as an EFTPOS transaction.

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Kyanar

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#2534841 4-Aug-2020 20:37

Handsomedan:

A debit card used in dip or swipe via a terminal will be free for the retailer - it's processed as an EFTPOS transaction.

So long as you select CHQ or SAV. Selecting CRD will process via Scheme rails, and cost the same as a Debit transaction (and if they're on Interchange+ or Interchange++, will actually cost them more than tapping it would). NZ still doesn't have Least Cost Routing.

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