Eftpos takes a swipe at contactless payments

Local payments giant eftpos is trialling a contactless payment system that can be used at the point of sale and online.

More than 50 retailers and Coles will trial the scheme, as major banks such as Commonwealth, Bendigo Bank and Adelaide Bank also sample the system.

The system avoids transmitting capturable details from the consumer to seller by using a digital token system between eftpos and financial institutions.

The system can be used on smartphones with any wireless technology such as WiFi, Bluetooth or Near-Field Communication which was designed with contactless payments as one of its functions.

Phone users would install an eftpos app and would be able to wave the phone at point of sale over a reader. Payments up to an agreed threshold would be made without further input.

At point of sale, iPhone users could scan a QR code, the square jumble of dots as opposed to a barcode, which would trigger payment.

The system relies on current eftpos infrastructure; managing director Bruce Mansfield said, leveraging its brand power in the online setting “would be an advantage for us”.

“There are a lot of eftpos users at the moment that are very keen to do shopping both on mobiles and online but have security concerns. We think this system will enable them to feel secure about it,” he said.

“This will be an Australian alternative to systems that are currently in the online space such as PayPal and it will allow us to capture some of the cash market that is currently being captured by contactless.”

National Online Retailers Association chairman Paul Greenberg said eftpos had to be an easy-to-use system that made the transition effectively to mobile payments.

“If this is a cogent system I think retailers will jump on it very quickly,” he said.

Greenberg, a veteran of online sales having been at Deals Direct, said keeping eftpos a lower cost option for retailers would be worth maintaining as their point of difference.

“I think it’s very important that they maintain that as a point of difference in a rather crowded payment space,” he said.

Contactless payments are “about to reach a tipping point” according to entrepreneurs like Ben Pfisterer, quoted in StartupSmart.