The first year of electronic cards was a disaster, but that is about to change.
Key points:Eligible consumers will now be able to buy electronic cards on their own in the same way they would buy a credit cardThe new card types include credit and debit cards, and will include an ‘electronic wallet’The changes will roll out from July 1, but the rollout is still under wayElectronic cards will now have to be purchased on the same day a customer applies for a card, rather than on the day of their first use.
That means that consumers will no longer be required to apply for a credit or debit card at a post office, and can choose to buy their card online instead of through a bank or other retailer.
“This change will have a profound impact on the lives of our customers, as it will allow them to be more involved with their finances,” said a statement from the Australian Consumer Affairs (ACAC) watchdog.
“The change will make it easier for our customers to pay their bills online and will make their lives easier.”
With more choice and greater transparency, consumers will have more confidence in the choice they make about where they spend their money, and we expect that this will lead to more people making the right choice.
“What is an electronic card?
Electronic payments are becoming more common in Australia, with around 1.5 million transactions being made on average per month, according to the Bank of America Merrill Lynch Global Payment Tracker.
Those payments are now processed through the new payment terminals which allow for faster payments and a much greater range of payment options, with electronic payments now made for about $1,300 a month in Sydney and about $2,000 in Melbourne.
Electronic payment terminals, or POSs, have been in use since at least 2010, but they are only currently available in the major cities.
They can accept credit cards, debit cards and PayPal, and they are used to accept cash payments.
There are more than 100 POS terminals operating in Australia and around 40 are being used in the country, according the Bank.
The rollout of electronic payment terminals is expected to start in July, with more than 50 per cent of card transactions being processed by the end of 2019.
There have been a number of issues that have come up over the last couple of years in the card market with a number being related to the introduction of new electronic cards.
The latest concerns have been about the cost of purchasing a card online, with some users complaining about their credit card bill being difficult to predict.
The introduction of electronic payments could also lead to some customers not using their card, because they would be unable to track their transactions on a credit report.
In July this year, the Australian Securities and Investments Commission reported that the cost to credit card issuers of the processing fees charged by card companies was between $20 and $30 per transaction, compared with about $7.50 per transaction in 2015.”
We are looking at an opportunity to provide an even broader range of card services in the future, including online, by introducing a new digital payment service that provides an electronic wallet to purchase digital card services,” ACCC chairman Rod Sims said in the statement.”
It is a significant milestone for the financial services industry and will see digital cards become a more mainstream payment option.
“Electronic card services are a growing part of the Australian economy, with the number of people spending money online soaring to $6.9 billion in the year to July 2018, according a report by Credit Suisse.
In June, the number and types of card payment terminals and other electronic card technologies were set to be released.
The changes have been welcomed by industry groups, but not all have welcomed the move.”
Our concern is that the introduction will cause confusion for customers and the wider financial community,” said Paul Halsall, senior research officer at the Australian Payments Association.”
Some will have their card and cash accounts locked up and they won’t be able or willing to access their money or payments online for fear of missing payments.
“Others will have to make arrangements with banks and other financial institutions to keep their accounts closed.”
But there is a group of consumers that are worried about the new electronic card payments system, with many calling it a “garden” for the economy.
“If we’re talking about a garden, then the plants will grow in the middle and we’ll be left with a few flowers and the whole thing will just die out,” said Michelle, a businesswoman who does not want to give her last name.
“I think there are people that are happy with it, but there are others that don’t.
I just don’t know how this can happen.”