Woolies gets OK for ePumps card monopoly
CALTEX/Woolworths and CALTEX/Safeways co-branded service stations across Australia will soon be able to accept contactless credit-card payments now that the company has successfully cut a deal with the Australian Competition and Consumer Commission (ACCC).
ACCC chairman, Graeme Samuel, announced yesterday (Wedneday 25th March) that the ACCC had agreed to let Woolies restrict epump payments to its own credit-cards for the next 18 months.
The decision means that only customers with a Woolies Everyday Money Mastercard will be able to use the new ‘swipe and go’ feature of the ePumps.
Holders of other credit-cards with contactless capabilities will have to go into the petrol station shop to pay at the cash-register as normal.
“In response to ACCC concerns, Woolworths has explicitly limited the operation of the exclusive arrangements until 15 August 2010,” said Samuel.
“The ACCC considers that the exclusive arrangement underpins the introduction of a new and innovative payment technology which benefits users through its speed, convenience and efficiency” he added.
Earlier the ACCC had put Woolies into a spin by knocking back the company’s request for official approval of its monopoly plan.
The giant retailer has been heavily promoting contactless payment at the new epumps as one of the unique benefits of its Everyday Money credit-card.
It has also been heavily promoting the fact that an ePump will simultaneously register customers’ loyalty scheme points when an Everyday Money card is used.
Indeed, the company told the ACCC that these capabilities were part of the reason why, although the Everyday Money card is a Mastercard issued by HSBC, and carries a PayPass chip for
contactless payments like many other Mastercards, the ePumps don’t accept Paypass.
Submissions to the ACCC on Woolies initial notification were less than impressed by that argument, and particularly those from other issuers of PayPass enabled MasterCards.
The Commonwealth Bank, which claims to have issued more than 1 million PayPass equipped Mastercards in Australia, was particularly critical of Woolies arguments.
Contactless payment credit-cards are a new technology as far as Australian consumers are concerned, and their road to widespread acceptance has been slowed by the incompatibility between
Mastercard’s PayPass and Visa’s competing Paywave system.
With Woolies promoting a third system, and yet other systems also claiming market mindshare ( such as the Victorian government’s myki public transport card) the road to widespread consumer acceptance of contactless payment cards is already plagued with pot-holes.
Even so, and despite giving Woolies the green light, it is clear that the ACCC understands these issues.
ACCC chief, Graeme Samuels said he expects consumers will soon be able to use other contactless cards at Woolies’ epumps.
“The ACCC will be concerned if the exclusivity period extends beyond 15 August 2010 or if there are no other payment options at that time or soon after the exclusivity period ends.”
He said the Commission had obtained a “public commitment” from Woolies that “… it will negotiate in good faith with other contactless card issuers to enable their cards to be used at epump.”
For more information go to
www.accc.gov.au
www.woolworths.com.au
www.hsbc.com.au
www.everydaymoney.com.au
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