Cashless society gets a step closer

Ian Bailey says Eftpos machines will need to be replaced. Michael Bradley / Getty Images

Businesses that process customer payments at point of sale are discovering there is a wider range of payment technologies and services available to them.

Along with the ubiquitous cash register and lone Eftpos terminal, Eftpos terminals able to accept new types of payment cards are being rolled out, as are IP PC systems that can be used at point of sale to process sales transactions without the need for an Eftpos terminal.

As for mobile payment systems, Ian Bailey, managing director for Eftpos terminal distributor Cadmus, says it's not only taxis and fast food delivery firms using mobile Eftpos to process payments wirelessly. He says public transport companies, taxi companies and seminar and market day retailers also use mobile Eftpos, and the speed and reliability of both Telecom and Vodafone mobile data networks are suitable for the wireless transactions as Eftpos only sends a small amount of data each time.

Bailey says any business running a portable sales operation can benefit from the secure payment guaranteed by online Eftpos transactions.

"Without [an online] Eftpos connection, retailers have to use zip zap machines from banks for card transactions, which means payment is processed manually and funds availability can't be validated on the spot," says Bailey.

Cadmus leases and sells mobile and fixed line Eftpos terminals of its own brand and others, and is in the process of replacing traditional terminals with those that accept new Europay, Mastercard and Visa (EMV) 'smartcard' credit cards. The new "EMV specification" is a compliance requirement for all Eftpos terminals and retailers must upgrade by January 1, 2008.

"They ensure the card and its owner are firmly linked not only by a PIN number, but by other security measures. They also support value-added service cards like loyalty cards," says Bailey.

After January 2008, older terminals cannot be resold or used and so need to be disposed of. Retailers can then choose to buy a new EMV compliant terminal or lease it. Leasing can cost less than $20 a week, says Bailey, and network service charges from merchant banks and the Eftpos services organisation ETSL are around $120 a year. Businesses using mobile Eftpos terminals also pay for each transaction to the mobile network carrier.

Jerome Faury, sales manager for electronic payments specialists Direct Payment Solutions (DPS), says modern payment systems are becoming increasing independent of a standalone Eftpos terminal and 'dial-up' phone line.

DPS, which facilitates and monitors 80 per cent of electronic transactions in New Zealand and counts Air New Zealand, Trademe, Ticketek, Qantas as customers, specialise in IP-integrated Eftpos solutions, or those that use the computer network and internet access of a business together with PC software to transmit payment transactions.

IP-integrated Eftpos uses a PC and pin pad instead of a standalone Eftpos terminal and cash register, meaning retailers do not have to key in the details of payments because the sub total of the sales transaction is automatically passed to the Eftpos processing system once the customer's card is swiped. (In non-integrated solutions the sub total of the transaction has to be keyed into the terminal.)

The advantages of this system - which is evident at supermarkets and service stations - is that Eftpos transaction processing time is faster and, if barcodes are used, keying errors (such as keying in $10 instead of $100 for a sale) are all but eliminated.

"Most businesses have an Eftpos terminal that plugs into a phone line and transacts through banking services; six to eight seconds later you get a response. IP-integrated Eftpos by comparison is 'always on' and so responses are received in one or two seconds," says Faury.

He says DPS systems are sold to large chain retailers, but also restaurants, bars and even florists - any company that uses a PC at point of sale instead of a cash register and does not want to use a standalone Eftpos terminal.

Removing the terminal provides more space, and if the DPS system goes down, transaction processing is completed over a backup private [cellular] wireless network, says Faury.

He says when businesses use IP-integrated Eftpos systems for payment processing, DPS as the monitor of the 'always on' service can see when a customer card has been swiped and can't be read by the card scanner. The system then sends an automated message to DPS's monitoring system and the company can call the customer before the customer realises the card reader is faulty. Other advantages include online software updates - such as the new EMV requirements, says Faury.

He says too many payment systems still rely on separate Eftpos terminals, cash registers and dial up connections - for retailers, wholesalers and distributors and mobile businesses a payment systems upgrade is therefore not only advisable, but likely to be beneficial.