BNZ decides to leave EFT-POS

Press, 15 September 1988, Page 36

BNZ decides to leave EFT-POS

The Bank of New Zealand is withdrawing from electronic funds transferpoint of sale (EFT-POS). As present, the four trading banks run one system, and the trust banks a parallel Cashline service, with the prospect of the systems becoming amalgamated next month under an inter-bank agreement. Yesterday, the BNZ's card services division chief manager, Mr Brian Bluck, announced the BNZ was withdrawing its, EFT-POS system from the" end of this month.

In September last year he called for a universal EFT-POS system using all cards in New Zealand.

The decision means that those with BNZ Autocards dr VISA cards will not be able to use them for EFT-POS transactions. EFT-POS terminals supplied to retailers by the

BNZ will also be withdrawn.

In a statement yesterday, Mr Bluck said that the BNZ had regarded EFT-POS as being on trial since its introduction in 1984. Recent reviews suggested that the technology was uneconomic, at least in its current form. The BNZ had found that increases in transactions in the EFT-POS system did not reduce costs.

Some trading banks and the trust banks were paying retailers 25c for each transaction, and someone had to bear that cost, he said.

The BNZ’s reviews had shown that there was the prospect of significant losses for years to come in EFT-POS in its present form, which did not make it viable or practical. The trading banks’ EFT-POS system is run on

a proportional fixed charge between the banks and a transaction use basis. One . source suggested that the BNZ was paying 40 per cent of the system’s costs. Mr Bluck indicated that the BNZ was looking to more advanced technology, such as a “super smart” card, which is being tested in Japan. This has its own processor and carries its own records; it does not require a live network. . “It is the heavy reliance of EFT-POS on a live telecommunications network that is at the heart of its cost problems,” he said. Westpac Banking Corporation’s public affairs manager, Mr Bill Day, said yesterday that the bank was reviewing the implications of the decision.