ANZ, through Apple Pay, has become the first financial institution in Australia to offer EFTPOS transactions via a contactless tap.
Until now, Australians, even with debit cards linked to savings or cheque accounts, went through the Visa or Mastercard credit card system if they chose to tap at the checkout, attracting higher fees.
For example, supermarket chain Aldi charges a 0.5% credit card surcharge if a debit card is used this way. The Reserve Bank of Australia reportedly estimates a merchant pays about 0.55% of the transaction value as a fee to their bank, but on EFTPOS this drops down to 0.15%.
The new ANZ capability allows Apple Pay to take care of the contactless transaction to avoid the Visa and Mastercard fees, and treat the transaction the same as if the customer inserted the card into the EFTPOS machine and pressed “cheque” or “savings”.
“Today marks a significant milestone for EFTPOS as we move from our traditional card-based payment method into mobile, enabling consumers with an iPhone or Apple Watch to choose the EFTPOS account they wish their mobile payment to be made from, being either their [cheque or savings] account,” said EFTPOS acting chief executive Paul Jennings.
The move sets up ANZ EFTPOS as a genuine competitor against Visa and Mastercard, which has been taking up a dominant share of the retail payments market as Australians turned to the convenience of “tap and go”.
The deal also maintains ANZ’s lead against the other three major banks – CBA, NAB and Westpac – in offering digital wallet solutions. ANZ is still the only Big Four on Apple Pay and the only one to be on all three of Apple Pay, Samsung Pay and Fitbit Pay.
ANZ products managing director Bob Belan said about 1.6 million ANZ customers with Access EFTPOS cards will be able to immediately take advantage of the new functionality, saying the bank has been “at the forefront of mobile payment services for some time now”.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.