Eftpos on the go helps mobile businesses stay solvent

By PETER GRIFFIN

They have failed to make an impact yet but Telecom claims technology improvements could lead to 20,000 mobile Eftpos terminal sales in the next three years.

Using mobile phone networks, mobile Eftpos terminals are popular overseas for tradespeople on the move and restaurant staff serving patrons who are paranoid about having their credit cards leave their sight.

But in New Zealand, one of the biggest Eftpos-using nations in the world and one based on small businesses, just 800 of the 80,000 Eftpos terminals in the country are mobile.

That may change as merchants are forced to upgrade their Eftpos terminals to meet new EMV (Europay, Mastercard, Visa) security standards for electronic transactions.

Around 35,000 terminals will have to be replaced to handle computer chip-based "smart cards" and higher data encryption levels by the beginning of 2006.

The remaining 45,000 terminals will need to be ready by 2008.

Telecom is now using its CDMA1x (code division multiple access) data network to handle mobile Eftpos transactions. It has partnered with US Eftpos terminal supplier Verifone, which is selling the Verifone 3600 here, imported through importer Tech Trans. Verifone has programmed the terminals with software for the New Zealand market.

The Verifone 3600 terminal costs $2700 to buy or between $90 and $120 a month to rent.

The terminals would operate wherever Telecom CDMA coverage existed, with each transaction taking eight to 10 seconds to be authenticated. Each transaction takes a paltry 2kb (kilobytes) of data, hence the speed of delivery.

The service costs $12 plus GST a month with 100 transactions built into the price. Further transactions cost 10c each. Garry Mitchell, Telecom's service development manager for mobile data, said the ongoing costs were comparable to using fixed terminals.

The encrypted transactions are carried over the mobile network to servers that feed into the Eftpos network, where they are treated just like regular Eftpos transactions.

"We're the first to do IP-based mobile transactions. We had to put new secure circuits into [Eftpos network operator] ETSL for it," said Mitchell.

The service is not approved for ANZ which runs a separate Eftpos network, but ANZ card transactions can be routed through ETSL.

From pizza delivery people to couriers, restaurant owners and mobile car mechanics, Mitchell said, mobile Eftpos stood to change the way businesses charged their customers.

Payable on delivery would take on a whole new meaning.

"You can't repossess ready-mix concrete if people don't pay," said Mitchell.

An obvious industry that would benefit from mobile Eftpos was the taxi industry. "They don't do debit cards and there's no instant authorisation," said Mitchell.

First Direct, a Christchurch taxi operator, has installed 22 mobile Eftpos terminals in its fleet of cabs.

"You'd be surprised how often passengers don't have enough cash. Our drivers have to take them to cash point machines or take a chance with a cheque," the company said.

Tourism operator Real Journeys is using mobile Eftpos terminals on the Earnslaw, a cruise boat that operates on Lake Wakatipu, Queenstown.

Adobe Designware, a small Auckland-based company that sells homeware in shopping malls, is also handling transactions via mobile Eftpos.

mobile Eftpos
Verifone