eftpos, BPAY Group and NPPA propose to amalgamate for the benefit of Australian consumers and businesses

Australia’s three domestic payment organisations – eftpos, BPAY Group and New Payments Platform Australia (NPPA) – intend to amalgamate, creating a stronger, unified entity (“NewCo”) that will aim to reduce costs, increase innovation and efficiency, and be better able to compete with the growing scale of overseas multinational payment platforms.

In Australia, international card schemes and multinational technology providers are dominating the payments sector. Change is needed to ensure that the Australian payments system supports the best interests of consumers and businesses, through increased choice and competition.

The proposal to amalgamate will seek to realise tangible benefits for Australian consumers and businesses, including a continued rollout of eftpos’ existing online capability, which seeks to give Australian retailers and consumers a low-cost option when purchasing online.

“eftpos, BPAY Group and the NPPA provide Australians with reliable, safe and affordable payments options every single day. Working together towards common goals, they can unlock incredible value, invest more in innovation and realise cost-savings that will ultimately benefit the Australian public.”

eftpos, BPAY Group and NPPA will be preserved as distinct operations in a new combined entity with a single Board which will determine a NewCo management structure. Customers will continue to have access to the existing payments methods they know and trust; including BPAY, Osko, eftpos, Beem It and PayID. Each entity will continue to have its own operating governance and management schemes. 

Benefits of the proposal

Amalgamation will aim to address current inefficiencies in the system, by creating a NewCo that provides multi-service infrastructure, broad capability, low cost of acceptance and a unified roadmap that is responsive to changing consumer expectations and technological advancements.

The combined entity will aim to deliver substantial benefits while also protecting the value and brands of eftpos, BPAY Group and NPPA. NewCo will aim to:

• Apply downward pressure on payment costs: A unified domestic payments entity will foster low cost real-time account to account and eftpos debit card form factor payments and seek to bring average merchant fees down further.

• Encourage and enable more payments innovation: Working towards common goals, joint investments can be made in new and existing payments infrastructure and services.

• Enhance competition: Through increased scope and scale, NewCo’s goal will be to provide sustainable competition to global payments companies in a rapidly evolving payments landscape.

• Improve efficiency and speed to market: Via reduced duplication, the unified roadmap aims to improve efficiency and speed to market of new innovations to meet unmet consumer needs.

Unanimous shareholder support

The Boards of eftpos, BPAY Group and NPPA have executed an agreement to implement NewCo subject to obtaining ACCC authorisation.

eftpos Managing Director Stephen Benton said, “For over 35 years, eftpos has been giving Australian customers and businesses access to reliable, affordable and safe payments. We pride ourselves on offering customers low cost acceptance options and intend to continue to deliver this. This proposal should allow us to continue to expand our online digital capabilities and innovation in areas such as digital identity, QR codes and mobile wallets including extending the role of Beem It to be an everyday lifestyle app.”

BPAY Group CEO John Banfield said, “BPAY Group has been at the forefront of collaborative innovation within the Financial Services sector and beyond for decades. Our more recent recognition such as one of Australia’s Best Workplaces, AFRs Most Innovative Companies, Best Product Innovation is a clear strategic advantage for the Board of NewCo as it transforms into an entity that can literally take on the world, should the ACCC agree that this is in the public’s interest or otherwise approve it.”

NPP Australia CEO Adrian Lovney said, “The COVID-19 pandemic has accelerated the pace in which the payments system is evolving. The increasing trends away from cash to online and in-app purchasing highlight how important it is for Australia’s domestic payments players to work together and invest in the current and future needs of Australians and how they want to pay.”

The proposal also requires that each organisation’s existing payments-related work program remains unchanged until at least June 2022. This includes:

• Extending eftpos acceptance online and in-app, and broadening of Beem It use cases;
• Development of QR codes in accordance with an agreed standard and in coordination with

relevant entities;

• BPAY Group roadmap including making BPAY fully available through Application Programming Interfaces (APIs) and the further development of its Osko service; and
• NPP Australia’s Mandated Payments Service which will enable authorised third-party initiated debits from more than 72m Australian bank accounts via a single connection.

A formal authorisation application will be filed with the ACCC in March 2021.