tyro

Retailers are increasingly imposing surcharges on credit card transactions - and for some, they could be a nice little earner.

Surcharges are hard to avoid - in our CHOICE survey, more than one in five participants had paid surcharges more than 10 times in the year.

Cameron Clyne made it clear that linear batch-processing computer systems were still causing problems for banks. He said the need for NAB’s NextGen project to replace old batch core systems with modern real-time banking systems had been validated by the November systems failure.

NAB isn’t alone in falling victim to old batch-processing systems problems. This week Commonwealth Bank suffered a glitch affecting up to five per cent of its accounts and leading to problems with its online banking and ATM networks

It's one of the great mysteries of banking: why does money disappear out of your account almost immediately when you make a payment, but take days to arrive when you're waiting for others to pay you?

The executive director of the Council of Small Business Organisations Australia (COSBOA), Peter Strong, said that the big four banks had been unable to provide him with an explanation of this quandary. In his submission to the inquiry, Mr Strong said that big banks’ practice of only settling EFTPOS transactions on weekdays was crippling business owners.

The volume of electronic payments has exploded. Thus glitches, failures or outages have a massive impact.

The industry has to lift its game. It is not about disaster recovery, but disaster avoidance. Modular, redundant and real-time systems, frequently upgraded, will also have problems, but they remain small and manageable.  

The emerging Australian company Tyro has been taking on the big banks in the area of debit and credit card transactions. And so pretty successfully.

According to BRW Magazine, they are now the 4th fastest growing business in Australia.

Tyro Payments is the first and only new entrant into the EFTPOS payment space in over 14 years and was named BRW 2010 4th fastest growing business in Australia. Tyro describes in its Senate submission the obstacles to entry and expansion in the card payment space.

Tyro innovates and competes successfully in a core banking process, but where are the other challengers? It is these growth companies that drive economic growth and welfare. 

„Was ist schon ein Banküberfall im Vergleich zur Gründung einer Bank?”,   dieser berühmte Satz wird  Bertolt Brecht zugeschrieben, der damit dem Zorn des Bürgers gegen Zinsbelastung und Wucher durch Gedinstitute Ausdruck gab.  

Auch in Australien ist diese Wut zu spüren, was den Ruf nach mehr Bankenwettbewerb anfacht. Politiker aller Schattierungen stellen sich mit der desrselben Forderung auf die Seite des Volkes,  doch praktisch passiert nichts.

Jost Stollmann  hat es aber geschafft, den Banken auf dem Gebiet des Eftpost-Zahlungsverkehrs erfolgreich Konkurrenz zu machen. Es war aber kein leichter Weg, so berichtet er im ’Wirtschaftsreport’.

Two nights of processing problems could be a symptom of deeper defects in NAB’s payment processing arrangements, though the bank does not accept this view.

"What's happened today is unfortunate,'' chief executive Cameron Clyne told reporters, after a lunch in Sydney.

"Unfortunately, with a large organisation these things happen from time to time."

In the pharmaceutical industry, established industries began to welcome the contribution of new smaller entrants in their market because they were sources of ideas, finance and/or candidate products, which they could allow to be developed to a certain level and then introduce into their own supply lines, either through acquisition or joint venture.

He noted that the attitude of the large pharmaceutical firms began to change towards encouraging such firms, often by investing in them.

The small electronic transaction business Tyro Payments is not daunted by its much bigger competitors. There are five companies competing in the $400 billion EFTPOS and credit market: the four big banks and Tyro Payments.

"It is not for the faint-hearted but innovation comes from entrepreneurs, not from large organisations," Stollmann says.

Peter Switzer interviews Jost Stollmann, CEO of Tyro Payments, the only specialised banking institution challenging the Australian major retail banks in a core banking process, merchant acquiring. Tyro offers a faster, safer, more reliable and efficient Internet EFTPOS solution to SMEs, medical practices, pharmacies, newsagents and retailers of all venues. Tyro does not take deposits.

Tyro stands for yes it is possible to challenge the banking establishment with innovation, agility and awesome service.

Münchenberg wants the industry to change its behaviour, embrace its critics and build its credibility, rather than merely yelling more loudly at an uncaring public. He argued in his speech that this was the hardest but most important step in salvaging an industry’s reputation.

Münchenberg said then: “The poorer the reputation, the less influence the industry has over its political and regulatory environment.” As the industry continues to be buffeted by the media and politics, more of the Big four’s decision-makers may realise what he was talking about.

Deborah Cameron interviews Jost Stollmann on how does one get competition into the banking sector. Tyro has found a place in a market hungry for diversity.

Jost Stollmann is a former German politician and current chief executive of Tyro Payments, the only company outside of the big four banks to process credit and debit card payments in Australia.

More Australians should go into new bold business models and challenge the banks.

It is six years in the red and $30 million in the hole but profitability is finally in sight for high-risk start-up Tyro Payments, which has pitted itself against the big four banks as a more efficient and innovative eftpos-credit card merchant facility.

It's not just a technology play (Tyro holds an Australian Banking license).

Tyro, the first new entrant into the EFTPOS market in 14 years, finished the financial year with 127% growth and close to cash break-even. Tyro processed $1.3 billion in Visa, MasterCard and EFTPOS transactions for 3,000 merchants and 8 percent of Medicare Australia general practitioners' claims.

The fee revenue increased to $14.4 million. The net loss for the year dropped from $5.1 million to $1.8 million, improving month on month with the growth in transaction volume.

Eftpos Payments is asking its members and vendors to explain how they might extend a life of a low cost system that makes lower profits for banks than rival schemes.

Payments acquirer Tyro has signed up about three thousand merchants in the three years since launching the IP based system, including more than 1000 surgeries and pharmacies. Almost half of Tyro’s revenue now comes from the health market.

Tyro reported a $1.8 million loss for the year ended June 2010, up from a $5.1 million loss last year. Revenue was up from $6.3 million to $14.3 million.

Will banks in Australia support their quarter-century-old Eftpos network with more than rhetoric? And invest once more in this most popular of payments services? Maybe and maybe.
The first annual report for the new coordinating company, Eftpos Payments Australia Limited, adopts a positive tone.

Scheme debit is all out of puff in Australia at present, a briefly dynamic mover in the payments space that's had all its momentum cut away.The market share for scheme debit peaked at 28.6 per cent in March 2010. This market share fell in three of the last four months, including in July. The market share of scheme debit is now 26.6 per cent.The loss of two percentage points in market share is largely Woolworths’ doing, and representative of a payments landscape that may be shifting more than is usual.

American Express is having a very rewarding experience in the Australian cards market. In the half decade since RBA rules shifted the ground for everyone in payments American Express has lifted its share from 12 per cent in 2002 to 20 per cent in July 2010.

The Commonwealth Bank (CBA) has blamed a "critical security change" for issues with its nationwide payment network today. The glitch caused otherwise valid MasterCard and Visa transactions to be declined at CBA point-of-sale terminals. It also caused some machines on the bank's nationwide ATM network to malfunction.

Retailers have been unable to conduct EFTPOS or credit card transactions with the ANZ Bank. The glitch is not believed to be related to the malfunction that blacked-out ANZ ATM and online banking systems in June this year. Glitches have remained a thorn for banks across the country, with most hit with faults this year.

Australia's largest retailer is playing the part of David taking on a true Goliath in the global financial world -- payments
multinational Visa. In a move led by finance director Tom Pockett and group head of financial services, Dhun Karai, Woolworths launched a broadside against Visa in April, refusing to allow debit card payments to be processed as credit transactions and routing all scheme debit transactions through the Eftpos network rather than Visa or MasterCard.

The infant Eftpos Payments scheme (EPAL) will mandate a shift to chip-based cards, and the replacement of the ubiquitous magnetic stripe technology, between 2011 and 2014. Making Eftpos cards useable in contactless payments (with no need to swipe or insert the card into a payments terminal) is the initial rationale for the switch to chip.

The cost of payment fraud increased 13 per cent last year, rising from 8.27 cents per $1000 transacted in the year to December 2008 to 9.38 cents in 2009.

At its meeting on 21 May 2010, the Payments System Board decided to undertake a strategic review of innovation in the Australian payments system. The purpose of this project is to identify areas in which innovation in the Australian payments system may be improved through more effective co-operation among stakeholders and regulators.

Woolworths will no longer process MasterCard and Visa Debit payments at its stores, in a move to cut costs, increase revenue and encourage shoppers to use cheaper payment systems. Most individuals will not be greatly inconvenienced by the move; customers of all but one bank (Commsec) will still be able to use the same debit card as before to access funds from their bank account.

Medicare spent 48 million spruiking the benefits of electronic claiming in doctors' offices in a two-month advertising blitz. The media campaign promoted the use of Easyclaim, Medicare Online and Eclipse in a bid to reduce attendance at Medicare offices for cash rebates.
Tyro processed 294,000 Easyclaim transactions during September, up from only 8,000 last April, when it began providing the service. 

The federal government has spent $48 million propping up the troubled Medicare Easyclaim system, intended to allow patients to lodge claims for a rebate direct from the doctor's office. Medicare claimed that savings in the order of $246m had been achieved since the start of Easyclaim in late 2007, and through Medicare Online. 

HCN has announced that it now has over 1,000 practices actively using the Medicare Easyclaim functionality in its PracSoft practice management solution. Easyclaim transactions can be completed in around 20 seconds, significantly faster than the two minutes typically required to complete a transaction using Easyclaim via a stand-alone EFTPOS terminal.

The Reserve Bank of Australia’s assistant governor, Malcolm Edey, has said that the RBA is a ‘reluctant regulator’ of credit cards; and despite a reduction in interchange fees, they still remain too high.

The outlook for new electronic transaction services company, Tyro, is positive. Major shareholder and CEO Jost Stollmann said that the company aims to break even soon. He said that it will probably have an initial public offering eventually. Several experienced financial services figures have invested in the company and joined its board.

Hackers checked into hotel networks more than any other in 2009, and all organizations hit by attacks didn't discover breaches for an average of 156 days, according to a new report based on real-world attacks worldwide. And not surprisingly, a whopping 98 percent of targeted data was payment card information.

Around the world pressure is building for some confrontation with Visa and MasterCard to redress the growing exploitation of their market power against retailers and card users – globally the unfair take is running at some $30 billion+ annually. 

Driven by data breaches and PCI DSS costs, the price of data security will continue to rise. Merchants bear 10 times the cost of fraudulent transactions than is borne by the banks.