Square to acquire Afterpay for $29B

Re:Square to acquire Afterpay for $29B by kiwijamo on Monday August 02, 2021 @02:37AM (#28033526)

In New Zealand, the local EFTPOS network is basically a home-grown network that the major NZ banks established in the 1980s's and have continued operating on a shoe-string budget ever since. For the most part merchants only have to pay a low fixed cost to access the network, whereas customers usually don't pay a fee (as most banks either bundle free EFTPOS transactions in a fixed monthly fee package or even offer it for free entirely for certain account products).

Visa/Mastercard on the other hand has Merchants paying 1-3% of all transactions as well as customers paying an annual fee (usually around $25 or so for standard non-reward cards but can go up to hundreds of dollars for higher end cards) for many card products (so a tidy profit from the merchants as well as some annual top-up from the customers).

From a typical New Zealand merchant's perspective it doesn't always make sense to offer Visa/Mastercard if they can decide to only accept EFTPOS cards (which almost everyone in New Zealand has) and keep the 1-3% that they would otherwise lose to Visa/Mastercard.

Visa/Mastercard offer more modern benefits (e.g. Paywave) which is not offered by EFTPOS which I suspect is partly due to the fact New Zealand's EFTPOS network does not generate much of its own income (just the small fees merchants pay to access the network I believe) so they just continue with the minimum amount of investment.

Personally I have an zero-fee American Express card that earns Air New Zealand Airpoints. As a fallback at merchants that don't accept Amex, I have a Wise (ex TransferWise) Mastercard on my phone (for NFC payments) as well as a physical Kiwibank Visa card. When none of these are accepted I fall back on to my EFTPOS card which is more or less on par with cash in New Zealand. I estimate around 50% of my expenses are on Amex, 10% on Visa/Mastercard and the balance through EFTPOS with the occasional cash for markets and the like.

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Re:Square to acquire Afterpay for $29B by yardstick on Monday August 02, 2021 @03:01AM (#28033686)

Kiwi here too, just one of the many in the UK. EFTPOS was great for its time, and yes the low fees are great, but I can’t but wonder about the security of a magstripe compared to a chip. Magstripes are long gone in Europe. Which reminds me- Revolut has great security controls, can enable/disable magstripe, so can disable until until you are in a shop that needs it still, like many places in the US.

That’s why I love Apple Pay (I’ve got UK & NZ bank cards on it, Wise & Revolut too). Now when going out for a local shop I often only take my phone and keys, no need for a bulky (or slim) wallet. Drivers license only if I expect to buy alcohol (and 90% of the time I could have left it at home).

Edit: Also to add, if the pandemic ended up hitting NZ the way it did in the UK/Europe/US, you would see a far higher uptake in contactless payments methods. I dislike touching pin pads now unless I absolutely have to!

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Re:Square to acquire Afterpay for $29B by pitterpatter on Monday August 02, 2021 @05:51AM (#28034694)

>In New Zealand, the local EFTPOS network is basically a home-grown network that the major NZ banks established in the 1980s's and have continued operating on a shoe-string budget ever since. For the most part merchants only have to pay a low fixed cost to access the network, whereas customers usually don't pay a fee (as most banks either bundle free EFTPOS transactions in a fixed monthly fee package or even offer it for free entirely for certain account products).

Sounds exactly like Interac in Canada. Although nowadays I believe most if not all Interac debit cards are also co-branded as MasterCard/Visa debit. Which makes em usable online as well. (There is a Interac online but only a small small small handful of sites even support it.)

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