Matt Bullock, the founder and owner of Australia’s biggest online merchant payments gateway eWAY, will wade into the physical world on Tuesday with a new mobile payment device.
The company will offer terminals provided by Quest and Mint Payments to its existing 20,000 business customers, with registrations for these being accepted in August. It hopes to pick up new customers and fend off competitors by offering better integration of payments with inventory and customer databases.
It processed more than $4.6 billion transactions in the 2014 financial year and is expected to earn $12 million to $14 million in revenue in 2015.
Tyro Payments is the only non-bank merchant acquirer in physical card payments in Australia. It has struggled to take market share from the major banks over a decade. It now processes about $6.5 billion in transactions a year for 12,000 customers.
But eWAY will not replace a bank as an acquirer because it will use banks, including its existing provider NAB, to do this.
The devices will initially link to accounting invoicing software Xero, inventory recording system Shopify and customer data system SalesForce.
eWAY at present is the dominant payment gateway used by businesses in Australia to accept money online. But it is facing competition from foreign players such as Stripe and Square, backed by cashed-up entrepreneurs.
After a visit to a conference in San Francisco called Transact 15, Mr. Bullock said he saw that they could do a better job on mobile point of sale (MPOS) devices.
“If you look at most of the MPOS devices out there, they just do the payment and that’s all they do,” he said.
“We link to Xero, Shopify and SalesForce to start with. You link the invoice, product and the customer data together – it will update each of those databases in real time.”
Although it has grown quickly, payments in person still dominate transactions, with just 3.1 per cent of retail sales occurring online in Australia.
As well as tapping a much bigger market, eWAY will also gain a new revenue source. At the moment, it gets 1.95 per cent per credit card transaction from the merchant or 30¢ per eftpos payment.
It will provide the payment terminal for free, but charge $29 a month to rent a contactless payment terminal, or $19 a month for a non-contactless terminal.
Most of the rental will go to the device maker, but eWAY will also take a cut of it.