EFTPOS - History

History

EFTPOS technology originated in the United States in 1981 and was rolled out in 1982. Initially, a number of nationwide systems were set up, such as Interlink, which were limited to participating correspondent banking relationships, not being linked to each other. Consumers and merchants were slow to accept it, and there was minimal marketing. As a result, growth and market penetration of EFTPOS was minimal up to the turn of the century. Since 2002 the use of EFTPOS has grown significantly, and it has become the standard payment method, displacing the use of cash. Subsequently, networks facilitating the process of money transfer and payment settlement between the consumer and the merchant grew from a small number of nationwide systems to the majority of payment processing transactions. For EFTPOS, US based systems allow the use of debit cards or credit cards. Now, "prepaid" cards can also be used.

In a short time, other countries adopted the EFTPOS technology, but these systems were limited to the national borders. Each country adopted various interbank co-operative models. In New Zealand Bank of New Zealand started issuing EFTPOS debit cards in 1985 with the first merchant terminals being installed in petrol stations. In Australia, the major Australian banks started issuing debit or EFTPOS cards (each under a different brand name) starting in 1986 and merchants started installing EFTPOS terminals at the same time. Debit cards issued by all banks could be used at all EFTPOS terminals nationally, but debit cards issued in other countries could not. Prior to 1986, the Australian banks organized a widespread uniform credit card, called Bankcard, which had been in existence since 1974. There was a dispute between the banks whether Bankcard (or credit cards in general) should be permitted into the proposed EFTPOS system. At that time several banks were actively promoting MasterCard and Visa credit cards. Store cards and proprietary cards were shut out of the new system.

In recent years, MasterCard and Visa have introduced a debit card which is widely accepted internationally. International transactions are generally in the local currency, requiring a currency exchange by the card company to the currency of the primary account.