Category: Payments

Bendigo Launches Apply Pay

Bendigo Bank appears to have quietly broken ranks and launched Apple Pay despite the fact the bank was on the list of banks who were  part of the failed attempt via ACCC to get Apple to allow NAB, CBA and WBC to have access to Apple’s NFC chip with their own apps. ANZ already offers Apple Pay.

Now you can enjoy all the benefits of your Bendigo Bank Mastercard with Apple Pay on iPhone, Apple Watch, iPad, and Mac. Using Apple Pay is simple, and it works with the devices you use every day. Your card information is secure because it isn’t stored on your device or shared when you pay. Paying in stores, apps, and on the web has never been easier, safer, or more private.*

To pay in stores, there is no need to wake your iPhone or open an app. Just hold iPhone near the reader with your finger on Touch ID. You’ll see “Done” on the display, along with a subtle vibration and beep, letting you know your payment information was sent. On Apple Watch, double-click the side button and hold the display of your Apple Watch up to the reader. A gentle tap and beep confirm that your payment information was sent.*

Available anywhere contactless is accepted. You can pay with your iPhone or Apple Watch anywhere you can make contactless payments

Cards dominate as Australians abandon cheques and cash

More on the digital transformation of the payments system.

The milestones report entitled Digital Economy released today by Australian Payments Network (AusPayNet), the payments industry self-regulatory body, reinforces that individuals and businesses are abandoning cheques and cash at a record rate as they embrace digital payments.

Today’s report highlights that in the 12 months to 30 June 2017, cheque use plunged 21% to dip under 100 million for the first time – the largest drop ever-recorded. This follows a 17.2% drop for the same period in 2016, and a 15.7% drop in 2015. The value of cheques dropped by 4.22% for the 12-month reporting period. This compares to1.76% the previous year.

Cash has lost its position as the dominant retail payment method, with cards now accounting for 52% of payments. This strong preference for cards is reflected in an accelerated decline in ATM withdrawals. The number of ATM withdrawals dropped by 7.5% to 625.4 million following a 6.6% drop the previous 12 months.

CEO of AusPayNet, Dr Leila Fourie said “The move away from cheques and cash is not surprising. What is surprising, however, is the accelerated rate at which this is happening. In our fast-paced, 24/7 society, consumers and businesses are consistently choosing faster, convenient payment options as new technologies shape a digital first mind-set.”

Digital payments continued their double-digit growth – up by 11.5% on the previous year overall.

In the 12 months to 30 June 2017, Australians made:
• 5.2 billion debit card payments – up 14.2%
• 2.6 billion credit card payments – up 9%
• 1.2 billion direct debit payments – up 13%
• 2.6 billion direct credit payments – up 6.1%

Australia’s card use is enabled by one of the highest penetrations of POS devices (39,337) per million inhabitants, ahead of Canada (38,870), Italy (36,902), Singapore (33,219) and the United Kingdom (32,858). Australia also has a comparatively high smartphone penetration, estimated at 84% in 2016.

“With our high use of smartphones, Australia is well-positioned for the next wave of payments innovation, and the industry’s New Payments Platform for faster payments will provide a stimulus,” said Dr Fourie.

The regulatory environment is continuing to evolve to support the transition to the digital economy. The Report provides an update on the Black Economy Taskforce, open banking, and card surcharging reforms.

Will Default Lowest Cost Automatic Payment Routing Be Implemented?

The RBA published the Payments System Board Update: November 2017 Meeting on Friday.   Of  special note are comments about least-cost routing for transactions using dual-network debit cards, as eftpos routing is on average lower than the Debit MasterCard and Visa Debit systems. They fired a shot across the bow of the industry, saying if the banks won’t implement default lowest-cost routing, the RBA could regulate. The industry will continue to drag its feet.

In fact if you have a card with multiple payment functions (like credit card and eftpos) on a single card, many pay wave terminals will default to the credit card option, unless you insert the card and choose eftpos or your change your defaults. This generates higher merchant fees, and revenues to the card providers and banks. This should also be addressed.

  • Recent trends in payment card fraud and various industry initiatives aimed at tackling it. Members observed that there had been a significant increase in card-not-present fraud over recent years. Fraud is costly to merchants and other participants in the payments system and can undermine trust in electronic payments. The Board agreed that addressing this rise in fraud should be a priority for the industry. Members welcomed the various initiatives already underway and encouraged industry participants to work together to expedite an effective solution.
  • The cost of payments to merchants. The Board observed that there was a modest decrease in average merchant service fees in the September quarter, with the new interchange standards having taken effect on 1 July. The Board was briefed on data showing the distribution of payment costs for merchants. These data indicate that payment costs are typically higher for smaller merchants, and confirm that debit cards are generally less costly for merchants than credit cards, with eftpos being a lower-cost system on average than the Debit MasterCard and Visa Debit systems. The Board strongly supported calls from a range of stakeholders for acquirers to provide merchants with least-cost routing functionality for contactless transactions using dual-network debit cards. It requested the Bank staff to continue to engage with the payments industry on this issue, recognising that a prompt industry solution was preferable to regulation.
  • Recent developments in the ATM industry including the decisions by a number of banks to remove the fees charged to non-customers on ATM transactions. Members noted that ATM coverage is relatively high by international standards, and that the number of ATMs in Australia had reached a record high while the number of transactions at ATMs was declining. In this context, they agreed there may be scope for consolidation or fleet rationalisation that results in a more efficient and sustainable ATM industry while still maintaining broad access to ATMs.
  • The staff’s assessment of LCH Ltd’s SwapClear Service, a UK-based clearing and settlement facility licensed to operate in Australia. The Bank will provide the assessment report to the Assistant Treasurer and the Australian Securities and Investments Commission, as well as making its findings available to overseas counterparts with a supervisory interest in LCH Ltd, after which the assessment report will be published on the Bank’s website.

The Board also approved a minor technical variation to the interchange standards which will be published next week. Bank staff have consulted informally with acquirers and schemes who have indicated that this change may result in a reduction in compliance costs.

Westpac Reveals ‘PayWear’ Wearable Payment Technology

Given the stalemate with Apple Pay, it is interesting to see the recent announcement that Westpac customers will soon be able to tap-and-pay hands-free with the announcement of a new wearable payment option, ‘PayWear’.  “Westpac PayWear uses the same contactless payment technology as your Debit Mastercard®. You simply tap the accessory wherever contactless payments are accepted and the transaction will be debited from your everyday bank account”.

Westpac 'PayWear'

PayWear Essentials, available early December, includes a silicone band and a ‘keeper’, which can be easily attached to an existing watch or fitness band, containing a microchip (PayWear Card) linked to the customer’s everyday transaction account.

Customers can tap and pay in the same way they regularly do with their debit card, without having to reach for their wallet or smartphone, through the new range of waterproof and battery-free wearable accessories.

Westpac Group Chief Executive, Consumer Bank, George Frazis said customers across the country embrace greater convenience and expect to be able to simply tap-and-pay.

“Australia has the highest contactless penetration in the world, and cards continue to replace cash as consumers demand convenience. We’re always looking for new ways to help make our customers’ lives easier, and with our new PayWear products, customers will be able to pay on-the-go, in one hands-free step.

“With PayWear, there is no need to search through a bag, login to an app or worry about battery life. It will be on the go with our customers and ready for use when they are.

“When speaking with customers, personal style and choice were important. In fact, 70% agreed that they would only wear a wearable device if it suited their own personal style and lifestyle. This is why we will collaborate with iconic Australian designers to create a variety of wearable accessory designs to suit different tastes, preferences and styles,” Mr Frazis said.

The first Australian designer to be announced, who will design a range of unique products for Westpac PayWear, is award-winning surfboard shaper and entrepreneur, Hayden Cox of Haydenshapes. A range of leading Australian designers will be hand-picked to speak to a wide mix of everyday Australians – from surfers and fitness fanatics, to busy parents, professionals and festival-goers.

Hayden Cox says the opportunity to collaborate with Westpac has been a natural fit when it comes to designing products that are innovative, functional and stylish.

“Functional design is something I’ve always been passionate about – particularly technology and products that improve experiences for people. It was this passion which led me to creating and filing a patent on my parabolic carbon fibre surfboard construction, FutureFlex, and wanting to uniquely design my product to improve the surfing experience.

“Working with Westpac to create an exclusive range of wearable accessories which evolve the way people make contactless payments is exciting to me. This product signals an inevitable and innovative progression of our everyday routines. While some customers may opt for the simpler Essentials range, there is also a part of the market that will want something with a little more flavour. This is where the products I’m designing will sit.”

All Westpac customers with an everyday banking account eligible for a Debit Mastercard® will be able to order a PayWear Card online via Westpac Live, which can be inserted into the PayWear accessory of their choice. The PayWear Essentials range of wristband and keeper will be available from December. The Designer range is due to be available to customers in early 2018.

Westpac customers will be able to use PayWear to make purchases on all contactless-enabled terminals.

“Unlike many other wearable payment options, our customers don’t require an expensive device to access this technology. Customers will be able to get a PayWear Essentials accessory free of charge for a limited time, making it accessible to all our everyday banking customers,” Mr Frazis said.

The announcement of PayWear builds on the Westpac Group’s strong history of digital innovation, as the first to introduce internet banking to Australia, and the first in the world to deliver fingerprint sensor technology (Touch ID) to mobile banking logon in 2014.

ANZ introduces accessibility features

ANZ today announced the rollout of its specially designed accessibility features to all retail and commercial Visa debit cards to make everyday banking easier for customers with a disability.

All ANZ’s 3.4 million Visa debit cards will now have tactile indicators, larger fonts and high visibility leading edges to help customers identify their cards and to help them easily identify which way to insert their card into ATM and EFTPOS terminals.

Commenting on the rollout, ANZ Senior Manager Everyday Banking Steve Price said: “We know that one in five Australians lives with a disability of some sort, so it’s really important we develop products all our customers can use conveniently.

“We have a commitment to inclusive design and accessibility standards in all aspects of our product development, so the extension of these features to a further 3.4 million cards is a significant part of delivering on that.”
The new cards also work with all of ANZ’s mobile payment options, including Apple Pay, Android Pay, Samsung Pay and Fitbit Pay. They also feature Visa PayWave so customers can ‘tap and pay’ wherever contactless payments are accepted, including at ANZ’s contactless ATMs

The rollout follows ANZ’s development of the accessibility features that were first introduced to its Access cards in October 2016. The features will also be extended to ANZ’s range of commercial credit cards in November, and to Visa debit cards in New Zealand early next year.

ANZ worked with Vision Australia to run focus groups with people who have different levels of vision impairment to test the accessibility features before developing the cards.

PayPal launches solution for marketplaces, platforms and crowdfunding sites

PayPal has announced the rollout of a new product designed for customers operating larger online marketplaces, like ride-sharing platforms, crowdfunding portals, peer-to-peer e-commerce sites, room rentals platforms, and others, starting in the USA.

They say that PayPal for Marketplaces is a comprehensive payments solution for marketplaces, crowdfunding platforms, and other environments where people buy and sell goods and services or raise money. The solution is ideal if you run a multi-party commerce platform and want a flexible, end-to-end solution for processing payments.

PayPal for Marketplaces supports a variety of common business types, including:

The platform can be tailored to the business’s needs, based on how much risk they want to manage with regard to their transactions. So for example, a business can decide if they want to handle payment disputes and chargebacks themselves, or if they want to turn over that responsibility to PayPal to manage instead.

Over the past few years, we’ve seen impressive growth in marketplaces and other platforms with unique payment needs. Marketplaces have become the center of ecommerce activity. Today, more than half of consumers who shop online are making purchases on marketplaces, and global marketplaces are expected to own nearly 40 percent of the global online retail market by 2020.

PayPal has long served marketplaces — from its origins with eBay to Uber and Airbnb — but until now, we’ve supported these customers with a variety of different solutions. Today, we’re excited to share that we’ve launched PayPal for Marketplaces, an end-to-end global payment solution that can help businesses harness the capabilities of the world’s best known marketplaces. We’re beginning to roll this out globally and expect to be available to all markets in the coming months. Marketplaces like Grailed and Rocketr are already using PayPal for Marketplaces today.

PayPal for Marketplaces is a comprehensive and flexible payment solution for businesses accepting and disbursing funds — whether consumers pay using their PayPal wallet, credit cards or debit cards. Marketplace businesses—from ride sharing and room-rental platforms, to online crowdfunding portals and peer-to-peer e-commerce sites—have unique needs, like collecting commissions and fees, setting payouts and multi-party disbursements. And because of PayPal’s global reach, we can support buyers in more than 200 markets and sellers in more than 120 markets. We can also tailor our solution based on the marketplace’s need. For example, for marketplaces that don’t want to take on all of the risk, we offer solutions that allow PayPal to help manage the risk. But we also offer a solution for other marketplaces that want more control and risk ownership.

As always, PayPal offers value-added benefits like buyer and seller protection, risk- and fraud-detection capabilities and seamless checkout solutions that drive conversion for merchants. This includes  One Touch, which enables more than 70 million of consumers around the world to skip logging in to PayPal at eligible merchant sites.

Myer launches Android and Apple Pay

From Fintech Business.

Myer customers will be able to use Android Pay and Apple Pay to make purchases in store via the launch of a new credit card, the Myer Credit Card, issued by Macquarie Bank.

Using Visa payment technology, Myer shoppers will be able to pay for purchases from their digital wallet on their smartphone through the Myer Credit Card App.

Commenting on the launch, Myer chief executive and managing director Richard Umbers said he was excited to be bringing Android and Apple Pay via the Myer Credit Card.

“The card will provide our customers with an easier way to pay and reward them for their loyalty,” he said.

“We are delighted with our partnership with Macquarie and Visa, which will further accelerate the growth of Myer’s digital capability.”

Macquarie head of banking and financial services group Greg Ward said the company is delighted to have been chosen as the card issuer.

“For many years we have offered credit card products directly and through white label arrangements, and this is the latest step in supporting innovative digital banking solutions for Australians,” he said.

Customers will also be able to accumulate Myer one shopping credits on the credit card, a spokesperson for Myer said.

Visa group country manager for Australia, New Zealand and the South Pacific Stephen Karpin said it was an “exciting time” for Australian retail.

“With digital technology driving new and imaginative commerce experiences … how people pay is at the heart of these experiences,” he said.

“It’s for this reason we’re delighted to be working with Myer and Macquarie Bank to bring the future of commerce to Australians today.”

Suncorp Introduces Samsung Pay

Suncorp has announced that customers with a Suncorp Clear Options Credit Card can now access Samsung Pay.

Suncorp Executive General Manager Deposits & Investments, Bruce Rush, said the introduction of Samsung Pay was the first step in Suncorp’s plan to enhance its digital payment offering.

“As we move to an increasingly cashless society, we know that our customers need more efficient and sophisticated technology, including digital wallets,” Mr Rush said.

“From 27 September, 2017 all customers with a Suncorp Clear Options Credit Card, and compatible Samsung device, will have the option to use Samsung Pay.

“We will continue to invest in our payment technologies and are committed to delivering new services that our customers want and need.”

Samsung Pay is a secure and easy-to-use mobile payments service available on compatible Samsung devices, including the recently released Galaxy Note8. Head of Mobile Payments at Samsung Electronics Australia, Mark Hodgson, said Suncorp and Samsung are committed to improving customer experience through innovation.

“With Samsung Pay, Australians are provided with the convenience, security and choice to undertake everyday tasks when transacting,” Mr Hodgson said. “In addition, Suncorp Clear Options Credit Card cardholders can now benefit from Samsung Pay’s unique features, such as our three-layered security system, and can enjoy using the service anywhere you can pay with a contactless credit card.”

Access to Samsung Pay only applies to Suncorp Clear Options Credit Card cardholders and does not include Suncorp debit cards.

Card Surcharge Changes Started

ACCC says that from tomorrow, every business across Australia will be banned from charging customers excessive surcharges for using certain types of EFTPOS, Mastercard, Visa and American Express cards to make payments.

The excessive surcharging ban has applied to large businesses since September last year and now extends to all businesses that are either based in Australia or use an Australian bank. The ban does not affect businesses that choose not to apply a surcharge to payments.

The ban restricts the amount a business can charge customers for using an EFTPOS (debit and prepaid), MasterCard (credit, debit and prepaid), Visa (credit, debit and prepaid) and American Express cards issued by Australian banks.

Payment types that are not covered by the ban include BPAY, PayPal, Diners Club cards, American Express cards issued directly by American Express, cash and cheques.

“The good news for consumers is that businesses can now only surcharge what it actually costs them to process card payments, including bank fees and terminal costs. For example, if a business’s cost of acceptance for Visa Credit is 1.5 per cent, consumers can only be charged a surcharge of 1.5 per cent on payments made using a Visa credit card,” ACCC Deputy Chair Dr Michael Schaper said.

“Our message to business is that you are not allowed to add on any of your own internal costs when calculating what surcharge you will charge customers. The only costs businesses can include are external costs charged to you by your financial provider.”

If businesses want to set a single surcharge across multiple payment methods, the surcharge must be set at the level of the lowest cost method, not an average. For example, if a business’s cost of acceptance for Visa Debit is 1 per cent, for Visa Credit is 1.5 per cent, and for American Express is 2.5 per cent, the single surcharge would be 1 per cent as that is the lowest of all payment methods.

“Our advice for businesses wanting to set a single surcharge regardless of the type of card their customers use is it must be the lowest of all the payment methods. You can’t use an average of all payment methods or you will land yourself in trouble,” Dr Schaper said.

Businesses should have received merchant statements from their financial institutions in July setting out their cost of acceptance for each payment method.

The RBA indicated as a guide that the costs to merchants of accepting payment by debit cards is in the order of 0.5 per cent, by credit card 1-1.5 per cent and for American Express cards around 2-3 per cent. The ACCC has found that some merchants have incurred higher costs than these but any surcharge level imposed by merchants cannot be higher than the costs incurred by them for accepting that payment method.

“If businesses are unsure about their cost of acceptance, they should contact their financial institutions,” Dr Schaper said.

Credit Card Rules Tightened

The Treasury has released draft legislation for review which is designed to improving consumer outcomes and enhancing competition. The purpose of the amendments is to reduce the likelihood of consumers being granted excessive credit limits, to align the way interest is charged with consumers’ reasonable expectations and to make it easier for consumers to terminate a credit card or reduce a credit limit.

The draft Bill would:

  • require that affordability assessments be based on a consumer’s ability to repay the credit limit within a reasonable period;
  • prohibit unsolicited offers of credit limit increases;
  • simplify how interest is calculated, including prohibiting credit card providers from backdating interest charges; and
  • require credit card providers to have online options to cancel a credit card or to reduce credit limits.

The consultation on the draft Bill will close on Wednesday, 23 August 2017.

Reform 1: tighten responsible lending obligations for credit card contracts

This introduces a new requirement that a consumer’s unsuitability for a credit card contract or credit limit increase be assessed on whether the consumer could repay an amount equivalent to the credit limit of the contract within a period determined by the Australian Securities and Investments Commission (ASIC).

This requirement will apply to licensees that provide credit assistance, and licensees that are credit providers, in relation to both new and existing credit card contracts from 1 January 2019. Existing civil and criminal penalties for breaches of the responsible lending obligations will apply to breaches of the new requirement. Existing infringement notice powers will also apply.

Reform 2: prohibit unsolicited credit limit offers in relation to credit card contracts

This prohibits credit card providers from making any unsolicited credit limit offers by broadening the existing prohibition to all forms of communication and removing the informed consent exemption. These amendments apply in relation to both new and existing credit card contracts from 1 January 2018. Existing civil and criminal penalties for breaches of the prohibition against unsolicited credit limit offers will apply. Existing infringement notice powers will also apply.

Reform 3: simplify the calculation of interest charges under credit card contracts

These amendments will prevent credit card providers from imposing interest charges retrospectively to a credit card balance, or part of a balance, that has had the benefit of an interest-free period. These amendments apply in relation to both new and existing credit card contracts from 1 January 2019.

Failure to comply with this requirement attracts civil penalties of 2,000 penalty units and criminal penalties of 50 penalty units. The infringement notice scheme contained in the Credit Act will also apply.

Reform 4: reducing credit limits and terminating credit card contracts, including by online means

A key amendment is to require credit card contracts entered into on or after 1 January 2019 to allow consumers to request to reduce the limit of their credit card (a ‘credit limit reduction entitlement’) or terminate a credit card contract (a ‘credit card termination requirement’).

Where a credit card contract contains a credit limit reduction entitlement or a credit card termination requirement the amendments also provide for the following:

  • the credit card provider must provide an online means for the consumer to make a request to reduce their credit card limit or terminate their credit card contract;
  • following such a request, the credit card provider must not make a suggestion that is contrary to the consumer’s request; and
  • the credit card provider must take reasonable steps to ensure that the request is given effect to.

These further amendments apply to credit card contracts entered into before, on or after 1 January 2019.

Failure to comply with these requirements attracts civil penalties of 2,000 penalty units and criminal penalties of 50 penalty units. The infringement notice scheme contained in the Credit Act will also apply.