How to not pay royalties

Eftpos terminal manufacturer Cadmus Technologies has bought Auckland-based software developer Aurium Systems for $300,000 in cash and 11 million Cadmus shares.

Aurium Systems co-developed the software that Cadmus' Eftpos terminals use and Cadmus Technologies managing director Ian Bailey says that by buying the company, Cadmus will avoid having to pay ongoing royalty costs.

"We were paying them royalties for the software and were looking at paying more as we expand into new markets," said Bailey.

Cadmus exports terminals to Australia, Malaysia and Singapore and has plans to enter other Pacific rim markets including India, China and several Southeast Asian countries.

New Zealand's estimated 85,000 Eftpos terminals will soon need to be replaced as a new standard is introduced to enable so-called "smart cards", credit cards with small microchips, to be issued. Cadmus estimates that market alone is worth close to $200 million.