Banks are in a race to maintain relationships with retailers, which is important because payment services can lead to more profitable loans and help banks collect deposits from businesses. Payments data is also crucial to help banks assess risk and observe trends in the macro economy.
Westpac’s new terminals, developed with Verifone, offer instant settlement to merchants to improve cash flow management and enable e-mailing of invoices to customers. By adopting Android software, Westpac plans to attract developers to build new features, including integrations with cloud point-of-sale systems and building loyalty programs.
Digitally driven merchant strategy
“This is a really important moment in our evolution of how we develop a digital-first merchant strategy,” said Chris de Bruin, Westpac’s managing director for personal and business banking. “We are moving to a new software structure – from closed to open.”
In the future, Westpac could use the new terminals to identify its retail banking customers when they tap a card, allowing it to offer innovative credit options at checkout, such as buy now, pay later. installment plans. This could help it meet Latitude’s plans to expand into new verticals after the Humm purchase and tackle the buy now, pay later sector.
“Over time, we can build services like pay in 4 or 6 or 12, and we can push to the terminal and allow merchants to increase the basket size at the checkout point,” Mr. de said. Brun.
“A lot of things you see in the online world can now happen in the physical world.”
Westpac will also offer new rates, in addition to its existing merchant payment plans. Its new terminals will have a rental cost of $24.75 per month plus a flat rate of 1.2% of the transaction, whether done in-store or online.
This compares to Square’s initial cost of $439 for the machine plus 1.6% on transactions. The ABC’s new smart device costs $29.50 per month to rent, 1.1% on in-store transactions and 1.5% on online transactions.
A merchant service fee of 1.2% is high compared to rates offered on bespoke plans – including “least cost routing” to send payments on alternative payment rails depending on the card used – which remain available for direct negotiation with the bank.
Mr de Bruin said Westpac will work with customers to offer them the lowest overall cost plans based on transactions and will continue to add new features to the terminal.
“This is a platform to take us down the open architecture path and I can start thinking about dynamically rolling out smart features to this device,” de Bruin said. “This is an important moment in our merchant service journey.”