The 25-year-old Eftpos system will be upgraded in a massive project, as it prepares to increase competition against credit card giants MasterCard and Visa.
The Eftpos upgrade comes as the system has been embarking on a marketing push over the past few years to promote the benefits of using the electronic payment system.
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While the new upgrade is a technical change, and businesses won’t see any visible upgrades for a while, Eftpos itself says this prepares the network for greater changes down the road.
Eftpos managing director Bruce Mansfield told SmartCompany this morning the system is being set up for further upgrades in following years.
“For Eftpos to remain a competitive player, we have to ensure that we keep costs down,” he says. “We need to continue to innovate, which will in turn lead to better payment products at a cheaper cost.
“There’s a massive potential benefit for businesses in this upgrade.”
The change is technical – essentially, Eftpos will build a central hub for payments, which will distribute transactions to banks. Currently, payments are sent to banks for processing – just one part of a complicated series of transactions.
The new system is much less complex, Eftpos says.
Mansfield says the hub will replace the transaction system used since the 1980s, and will help “get our products to market much faster”.
This means businesses will benefit from the faster roll-out of new products and services in the future.
“It means that any system changes or product enhancements will be done once centrally, rather than requiring participants to make multiple changes,” Mansfield says.
This year has been a busy one for the Eftpos network. In May, the network said it would start trialling mobile payments with selected retailers.
Last year, the Reserve Bank Payments Board provided support for a claim made by Eftpos that Visa and MasterCard could be taking part in anti-competitive behaviour.
Upgrading the Eftpos system to ensure a faster roll-out and new products keeps the network up to speed with MasterCard and Visa, Mansfield said.
“We certainly want to continue that as we move into online and mobile payments,” he says. “That’s the benefit of being a domestic player in a sense that we don’t necessarily have to play the game that others do.
“The hub will continue to help us innovate, and we’re working with others to improve the experience for businesses.”
This story first appeared on SmartCompany.