By Branko Miletic

Some time ago, EFTPOS kick-started the cashless revolution with an easy way to pay by debit, credit or charge card. Customers with empty pockets travel fast and retailers with a wide range of payment options are the obvious choice for this convenient shopping method.

As with all types of retail technology, there are improvements, enhancements and of course advancements in the products. One such improvement is XPOS.

According to the literature, XPOS is the next generation of flexibility, providing a virtual store with over 150 new products and services from one compact terminal. Added to EFTPOS PLUS, it is claimed to dramatically expand the terminal’s capabilities and is designed to offer customers anything from magazine subscriptions to fishing licences. Customers can also can top up their mobile account, pay an electricity bill and buy a friend a gift voucher while doing the weekly shopping, according to the designers of XPOS.

Developed by the Commonwealth Bank of Australia (CBA) in response to a mature market where operators are competing on price as well as the need for a flexible product offering non-financial services that can be tailored to the retailer’s needs, XPOS is designed to provide an adaptable platform separated from the EFTPOS host that allows the addition of new services quickly and easily as new products become available.

According to the CBA, by providing more products and services, retailers now have an opportunity to increase store traffic and cross-sell to existing customers, while generating additional sales revenue through commissions on every product sold. Commissions range from a flat payment of 55 cents to a 27% margin.

There is no additional charge for the service, no up-front stock costs, no need for extra shelf space and no concerns about security as products are only printed following payment. Inventory is kept automatically and the terminal itself is slimline, quiet and easy to use. XPOS can also be integrated into point of sale as a PC application for even greater convenience.

Retailers can log on to the XPOS extranet service at any time to view sales and commission reports for services sold plus get news of the latest products, margin changes and current promotions. The terminal ensures authorised operator access by way of a user ID.

The CBA says retailers can choose any or all four of the XPOS functions available depending on what suits their needs. The four categories are products and services, gift cards, bill payment and Bartercard. This includes options like mobile phone, home phone, internet and calling card recharge. Customers can also download ring tones, screen logos and games to their mobile phones. According to several statistics, the total phone card market in Australia is currently worth about $750 million per annum.

XPOS is claimed to have been specifically designed to enable retailers to run a more efficient gift voucher system with plastic cards holding a magnetic strip. It replaces the time-consuming process of traditional paper gift card systems and can significantly reduce operating costs. Although it is somewhat anecdotal, the evidence in the United States retail market shows that gift card purchases have grown by 300% since electronic cards were introduced.

The average transaction in Australia is two cards with a purchase value of $50 to $100 each, adding up to a total transaction volume including issue and redemption of $160-360 million each year. Also, gift cards are also the most popular non-cash reward used by corporate organisations as incentive tools.

According to the managing director of Harvey World Travel, Barry Mayo, “The gift card program is a market first that not only provides an innovative product for both our leisure customers and corporate clients, but also reduces administration. We expect sales of over $1 million to accrue directly to Harvey World Travel Ltd – and a further $5 million through the Harvey World Travel network in the first year.”

Another proponent of gift cards, Mark Newman, financial controller Ezy DVD, says that “the electronic gift card program provides an appealing and durable presentation to the consumer and provides us with enhanced, timely reporting and back end reconciliation which will generate significant ongoing clerical savings. The majority of our cards are redeemed in a different store from where they are issued and the terminals provide a simple system to check the balance of a customer’s card within a few seconds.”

According to details supplied by the CBA, in Australia, some 54% of bills are paid over the counter and that is higher than the percentage of bills paid by direct debit, phone, internet or post combined.

According to the general manager of sales and account management, Commonwealth Bank, Steve Baric, "The continuing dominance of the over-the-counter market is driven by consumers’ preference to pay their bills using cash rather than credit. However, current over-the-counter bill payment options are often not only inconvenient for consumers, they are also expensive for billers. In response, the Commonwealth Bank has launched a new concept known as BPOINT, which is designed to make bill paying easier, cheaper and more accessible for consumers and billers across Australia."

Offered as part of the CBA’s XPOS suite, the BPOINT bill payment system allows merchants to facilitate bill payments to some of the largest billers in Australia, including telecommunications and utility companies, government agencies, banking and finance companies.

It also allows customers to pay bills outside of business hours and is cost effective because bill payments don’t attract a Merchant Service Fee. Barcode technology and scanners mean that BPOINT is even suitable for fast lane environments. Because billing cycles of each biller vary – fortnightly, monthly, quarterly and annually – BPOINT makes it possible to attract regular customers to participating outlets.

"For the customer, I think BPOINT is a benefit because they can come into somewhere like a pharmacy and it’s virtually a one-stop shop. While they’re waiting for the script to be filled they can pay some bills," says pharmacist and owner of City East ChemPlus in South Australia, Victoria Leibe.

The CBA says that XPOS also opens the door to Bartercard customers, allowing businesses to exchange goods and services without the need for cash. Bartercard formalises the age-old business art of bartering and frees up cash flow for other purposes. Electronic processing through XPOS allows quick and easy transactions and eliminates the extra expense of bank charges.

And according to Kitti Kalinowsky, owner of Lanna Thai Cuisine in Subiaco and Bartercard member, "XPOS has made accepting Bartercard simple and quick. XPOS Bartercard means I am able to swipe the customer’s card and wait for the approval. It’s that easy and it’s a real-time transaction. Gone are the days of manual processing so there are no queues, no reconciliation and no need to call for an authorisation. XPOS Bartercard means that for me and the diners at my restaurant, paying with Bartercard is just like using a credit card."

A spokesman for the CBA says that XPOS is available through the Commonwealth Bank and is a free upgrade to the bank’s EFTPOS PLUS terminal. Once an XPOS compatible terminal is ordered, installation takes about 15 minutes and is completed by a representative from the bank. Users simply require an analog dial-up phone line and access to a power point. Once installed, technical assistance is available 24 hours a day, seven days a week.

Pull quote = XPOS is claimed to have been specifically designed to enable retailers to run a more efficient gift voucher system with plastic cards holding a magnetic strip. It replaces the time-consuming process of traditional paper gift card systems and can significantly reduce operating costs.