MasterCard Inc.'s five-year road map for electronic payments in Australia requires issuers and card accepting merchants there to adopt its PayPass contactless payment service beginning next year.
The card brand's plans also include policy changes related to the conversion to cards that adhere to the EMV Integrated Circuit Card Specifications. The strategy was announced Monday.
Beginning in October 2012, all new credit, debit and prepaid MasterCard products must support PayPass functionality, and all new MasterCard merchants in certain retail channels must obtain at least one terminal that supports PayPass purchases of $103 or less.
MasterCard said its contactless transactions in Australia increased more than 235% between June and December 2010 after certain merchants promoted the technology.
MasterCard claims Australian institutions have issued more than 5.3 million PayPass cards. It said that about 35,000 Australian merchants already accept contactless payment.
MasterCard also placed deadlines for all card issuers and merchants to become EMV-compliant. Australia last year began a voluntary shift to EMV technology, which provides another layer of fraud protection by requiring cardholders to enter a PIN at the point of sale to access the card's chip to authenticate the transaction.
Beginning in October of this year, all new and reissued MasterCards in Australia must be EMV-compliant, and beginning in April 2012 liability for fraud that could have been prevented in transactions using a chip-and-PIN card "will shift to the non-EMV party," MasterCard said.
All POS terminals in New Zealand must be EMV-compliant by April 2012, MasterCard said. And by April 2014, all payment cards and merchants in Australia and New Zealand must be EMV-compliant, it said.
All Australian automated teller machines must be EMV-compliant by the end of 2015, MasterCard said.
MasterCard's new strategy will "touch every part of the payment landscape" in Australia, with the goal of increasing payment security and transparency on card fees, Eddie Grobler, MasterCard's divisional president in Australia, said in a press release.
MasterCard also said that beginning in October of this year its acquiring banks must provide merchants with separate prices for accepting credit and debit cards "to help merchants identify the cost of acceptance for each product." Australia's central bank has issued separate mandates to increase payment cost transparency.
Some of MasterCard's moves associated with the release of the road map are part of it the company's effort to expand in the debit card market in Australia, observers say.
"MasterCard is trying to gain market share for debit cards in a country that has its own debit network," Randy Vanderhoof, executive director of the Smart Card Alliance in the U.S., said in an email. "It makes sense that [MasterCard] would want to establish their debit-card-acceptance footprint with contactless readers."
