New merchant technology is rapidly hitting the Australian payments market, putting acquirers on the spot to address the changes or risk losing relationships.
"We've seen some rapid movement in this space," said Steve Aliferis, head of business banking and product for Westpac Bank in Sydney, noting Australia is often the testing ground for new forms of payments technology. "This is primarily due to the global view that Australia is a dynamic marketplace as well as a responsive and sophisticated market."
To shorten time to market for new payment and merchant features, Westpac is using technology from Verifone for its upgrades, and the bank deemed its relationship with Verifone as a "partnership" and not "outsourcing."
Westpac will deploy more than 100,000 Verifone point of sale terminals, using a model that is capable of accepting Bluetooth, EMV and NFC contactless payments. The Verifone deal, which includes cloud-based terminal management, does not affect Westpac's existing consumer mobile payments play, an internally-developed program which enables consumers to download the Westpac mobile banking app and select which eligible credit and debit cards to use for mobile payments.
Westpac will work with Verifone to spot ways to add automation and multi-channel capabilities to mobile phones or mobile-enabled terminals, processing, marketing and loyalty programs. Verifone will also help power a connection to China Union Pay that will enable Chinese consumers to make contactless payments while traveling in Australia.
Westpac's move comes as more merchant-focused payment technology companies look to build a market in Australia, often by targeting specific merchant niches.
Square is increasing its presence in Australia via its Register tablet point of sale system, which is primarily used by small to medium sized businesses. PayPal also offers EMV-compliant mobile point of sale services in Australia.
Stripe, which sells technology that allows merchants to build m-commerce interfaces, is also active in Australia, and mobile point of sale provider Powa is using local partnerships to build a presence in Australia. And the local point of sale technology company Tyro Payments is integrating with Canadian restaurant ordering app TouchBistro.
Westpac said the primary goal of the Verifone partnership is to better match digital innovation with consumer demands.
"Our goal is to bring together the nimbleness of a global partner, and the security and stability of our banking platforms," Aliferis said.
Verifone, which is betting on the mobility craze fuel its revenue, hopes to find banks that eager to get in front of the multi-channel services from relative newcomers to payments technology.
Verifone plans to release multiple new products for merchants and acquirers this year in an attempt to promote its cloud-enabled services, including point of sale technology, hosted payments and merchant services management, and identity fraud protection.
"All of the technology behind these services has changed quite a lot," said Vincent Roland, senior vice president of global services solutions for Verifone, noting the point of sale market has become more tablet-focused. "All of these new applications demand more agility than before and most of the banking systems that are out there today don't have this agility. It's a make-or-buy decision and more people are turning to outsourcing."
European payment markets have adopted the "payments as a service" model over the past couple of years, Roland said, and the model is also quickly spreading in other markets such as North America and the Asia/Pacific region. Apple's expansion of Apple Pay to markets outside the U.S. will also benefit Verifone's strategy, Roland said.
"The Apple Pay [international expansion] announcements are pushing the need for a faster deployment," Roland said.