MasterCard Worldwide on March 28 announced a five-year “roadmap” for electronic payments in Australia that will require issuers and card-accepting merchants there to adopt its PayPass contactless-payment service beginning next year.
The card brand’s roadmap also includes policy changes related to the conversion to EMV chip-and-PIN cards.
Beginning in October 2012, all new credit, debit and prepaid MasterCard products must support PayPass functionality, and all new MasterCard merchants in certain contactless-ripe retail channels must obtain at least one terminal that supports PayPass purchases of $100 (US$103) or less.
Taxis, news agencies, bookstores, supermarkets, convenience stores, grocers, pharmacies, service stations, parking lots, fast-food restaurants, cafes, bars, cinemas and theaters are among the retail channels MasterCard says would require at least one terminal that accepts contactless payments.
MasterCard says its contactless transactions in Australia increased more than 235% between June and December 2010, as such merchants as McDonald’s Corp., 7-Eleven Inc., Wesfarmers Group’s Bunnings Warehouse and JB Hi-Fi Ltd. promoted the technology. It did not provide specific transaction data.
The card brand claims Australian institutions have issued more than 5.3 million PayPass cards. Some 35,000 Australian merchants already accept contactless payment, MasterCard said.
Also in its roadmap, MasterCard lays out 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 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 in the announcement of its roadmap. And by April 2014, all payment cards and merchants in Australia and New Zealand must be EMV-compliant, MasterCard said.
Also as part of its roadmap, MasterCard said that beginning in October 2012 consumers for the first time may request additional cash back at the point of sale during transactions conducted with MasterCard EMV cards.
Moreover, in its roadmap MasterCard said merchants accepting online payments in Australia must provide either a MasterCard SecureCode authentication or the equivalent for transactions exceeding $200 by April 2013, and all Australian ATMs must be EMV-compliant by the end of 2015, MasterCard said.
MasterCard’s new roadmap 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 divisional president in Australia, said in a press release.
Also as part of its roadmap and related announcements, MasterCard said that beginning in October 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 roadmap are part of the card brand’s efforts to gain a bigger share of the debit card market in Australia, observers say. Australia’s EFTPOS debit network is independently operated by financial institutions.
“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 U.S.-based Smart Card Alliance, tells PaymentsSource via email. “It makes sense that (MasterCard) would want to establish their debit card acceptance footprint with contactless readers, since PayPass is a global standard, and people from other parts of the world would be able to use their PayPass cards in Australia as well.”
As far as requiring merchants to invest in contactless equipment, the cost of adding contactless is “incremental” to merchants installing new terminals, Vanderhoof notes.
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