1984 Debit cards and EFTPOS

In Australia, Electronic Funds Transfer at Point of Sale (EFTPOS) was first trialled by Woolworths and Westpac bank at BP service stations. All the major banks were soon on board. However, in 1985 Australians were still using cash for 90% of all transactions.

The EFTPOS system, allowing customers to pay by debit card at the point of purchase, was developed in the United States in 1981 and rolled out the following year. Originally it was limited to individual banking relationships and only later extended to become an inter-bank network with terminals providing access to accounts in any participating bank. In America, the take-up of the system was slow, with cash payments remaining the norm up to the beginning of the 21st century.

The first EFTPOS machines were large clunky objects that required customers to swipe their cards and enter a personal identification number (PIN).  Later cards had an embedded electronic chip. The introduction of contactless payments, where the embedded chip and antenna enable consumers to wave their card, fob, or handheld device over a reader at the point of sale terminal increased the use of cards for purchases – although individual purchases were limited to a relatively small amount ($100 in Australia).

In Australia, the system is managed by a privately owned company, Eftpos Payments Australia Ltd. The shareholders include leading Australian banks and retailers. According to their website, in 2016, Australian consumers performed more than 2.2 billion transactions worth more than $138 billion at more than 900,000  terminals. It is Australia’s most widely used debit card payments system. Each day Australians make more than 6 million EFTPOS transactions.

Early in 2017, the Reserve Bank of Australia published figures showing a continued decline in Australians’ use of cash. They pointed to ATM withdrawals being at a 15 year low and declining between 6 to 7.7% for the previous three years. Some overseas countries have become virtually cashless – in Sweden just 2% of payments are made with cash. The coronavirus pandemic in 2020 accelerated the move to cashless, no-contact payments with the requirement to enter a PIN for amounts over $100 waived in the interests of hygiene.

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