Woolies spits the dummy over opposition to its ePump exclusivepayment plan
Giant Australian retailer, Woolworths, has threatened to take its bat and ball and go home if it doesn’t get the monopoly privileges it wants at so-called ePumps on the forecourts of its Caltex/Woolworths
and Caltex/Safeways co-branded petrol stations.
Woolies dummy spit has been revealed in submissions to the Australian Competition and Consumer Commission (ACCC) published on the corporate regulator’s web-site.
The company’s tantrum arose after banks, credit unions and motor industry groups opposed a request it put to the ACCC for an exemption from the Trade Practices Act.
Woolies wants to lock out any other payment card at the ePumps, and restrict acceptance to its new ‘Everyday Money’ MasterCard.
It says if it doesn’t get what it wants then no-one at all will be able to pay at the ePumps.
Instead, everyone will continue to have to go inside the store to pay.
That is made very clear in Woolies latest submission, dated 16th December 2008 and lodged under the signature of Rod Bordignon, Group Legal Manager – Corporate & Commercial, Woolworths Limited.
“There are currently no other contactless payment facilities that provide the features required by Woolworths in order for it to introduce any form of contactless pay at pump facility. [and]
“Absent Woolworths developing ePump, no other similar or competing business technology would be put in place at Caltex Woolworths or Caltex Safeways co-branded fuel outlets.”
Woolies submission says that there are three main reasons why the existing MasterCard Paypass and Visa PayWave technologies are unsuitable.
First they are incompatible with each other.
Second, a PIN number isn’t compulsory.
Third, they aren’t integrated with the system that Woolies uses for its Everyday rewards scheme. *
Indeed, Woolies claims that in the Australian marketplace its Everyday Money card is a “third type of contactless payment facility (in addition to Visa PayWave and Mastercard PayPass).”
Of course, Woolies new card it no such thing. Indeed as the submission itself, notes, the Everyday Money card “is a MasterCard branded credit card with the Paypass technology embedded…[and]…can be used
like any other Paypass compatible MasterCards in any merchants terminals that are branded Paypass.”
Woolies may have not have installed Paypass readers at its ePumps; and instead developed card readers that integrate a link to its existing rewards scheme. But that’s relatively simple IT technology,
as too is the company’s programming of its own EFTPOS switch to require mandatory PINs and pre-authorisation for all transactions.
Aside from these bells and whistles, Woolies, (i.e. HSBC’s) Everyday Money card is still just a Mastercard Paypass card.
So whilst Woolies may rightly point out there are many examples of competitors offering exclusive benefits to their own customers when they pay instore using either cash or a company branded card, and
its use of the cards at its ePumps is innovative, that’s unlikely to prove enough.
The most appropriate recent comparison is undoubtedly with the ACCC’s recent decisions on card exclusivity plans for Stadium Australia (ANZ Stadium) and the Sydney Cricket Ground.
In both those cases the ACCC failed to approve exclusive deals for Visa contactless cards. (See our report at
www.ecommercereport.com.au/story52.php ).
A sppokeswoman for Woolies, Group PR Manager, Clare Buchanan, told eCommerce Report by email that the characterization of the company's approach as a dummy spit was incorrect."
"E-pump is already rolling out - the issue that the ACCC is clarifying is over the third party exclusivity - given that HSBC is our credit card issuer.
E-pump is an alternative payment mechanism, not a replacement payment mechanism - any customer may still pay for their fuel in the service station exactly as they do now.
It's proprietary technology that we've developed ourselves and it's a substantial investment in convenience for Everyday Money customers.
Key to this is the systems linkage between the Everyday Money Credit Card and the Everyday Rewards fuel discount scheme - e-pump enables customers to pay and get their discount
at the pump with a single card. Even if e-pump did open up to other contactless cards, those customers would still have to go into store to claim their fuel discount.
To access the Woolies and other ePump submissions go to the ACCC’s web-site
www.accc.gov.au/content/index.phtml/itemId/846675/fromItemId/776499/display/submission
*(Not to be confused with the Everyday money cards, Woolies Everyday rewards cards are simply a quick link to the company’s customer loyalty scheme. They keep track of rewards points and enable card
holders to access discounts at Woolies Caltex and Woolies Safeway co-branded service stations without having to present a printed paper docket.)
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