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Sunday, September 18, 2011

New Zealand

The EFTPOS (electronic fund transfer at point of sale) in New Zealand is highly popular. In 2006, 70 percent of all retail transactions were made by eftpos, with an average of 306 EFTPOS transaction being made per person. At the same time, there were 125,000 EFTPOS terminals in operation (one for every 30 people), and 5.1 million EFTPOS cards in circulation (1.27 per capita).
The system involves the merchant swiping (or inserting) the customer's card and entering the purchase amount. Point of sale systems with integrated EFTPOS often sent the purchase total to the terminal and the customer swipes their own card. The customer then selects the account they wish to use: Current/Cheque (CHQ), Savings (SAV), or Credit Card (CRD), before entering in their PIN. After a short processing time in which the terminal contacts the EFTPOS network and the bank, the transaction is accepted (or declined) and a receipt is printed. The EFTPOS system is used for credit cards as well, with a customer selecting Credit Card and entering their PIN, or for older credit cards without loaded PIN, pressing OK and signing their receipt with identification through matching signatures. Larger businesses connect to the EFTPOS network by dedicated phone lines or more recently internet protocol connections. Most smaller businesses however have their EFTPOS terminals communicate through their regular voice line, often resulting in shouts for people to get off the phone or "Declined Transmission Error" transactions when the merchant forgets someone is on the phone.
Virtually all retail outlets have EFTPOS facilities, so much that retailers without EFTPOS have to advertise so. In addition, an increasing number of mobile operator, such as taxis, stall holders and pizza deliverers have mobile EFTPOS systems. The system is made up of two primary networks: EFTPOS NZ, which is owned by ANZ National Bank and Paymark Limited (formerly Electronic Transaction Services Limited), which is owned by ASB Bank, Westpac and the Bank of New Zealand. The two networks are intertwined and highly sophisticated and secure, able to handle huge volumes of transactions during busy periods such as the lead-up to Christmas. Network failures are rare, but when they occur they cause massive disruption, resulting in major delays and loss of income for businesses. Most businesses have to resort to manual "zip-zap" swipe machines in such case. Newer POS-based terminals have the ability to "capture" transactions in the event of a communications break-down - instead of entering a PIN, the customer signs their receipt and the transaction is accepted on a matching signature, and the transaction is stored until the network is restored. A notable example of this occurs on the Cook Strait ferries, where in the middle of Cook Strait there is no mobile phone reception to connect to the EFTPOS network.
EFTPOS is used for transactions large and small, from 10c up to thousands of dollars (or the daily limit of the EFTPOS card). Depending on the user's bank, a fee may be charged for use of EFTPOS. Most youth accounts do not attract fees for electronic transactions, meaning the use of EFTPOS by the younger generations has become ubiquitous (and subsequently cash use becoming rare). Typically merchants don't pay fees for transactions, most only having to pay for the equipment rental.
ATM cards and EFTPOS cards were once separate, but today EFTPOS and ATM cards are combined into a single EFTPOS-ATM card. The cards are issued by banks to customers, and often come in multiple designs, with some banks allowing customers to place a picture of their choice on their EFTPOS card. One of the disadvantages of New Zealand's well-established EFTPOS system is that it is incompatible with overseas systems and non-face-to-face purchases. In response to this, many banks have adopted international debit card systems such as Maestro and Visa Debit in addition to the New Zealand EFTPOS system.

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