Merchant Centre

The future of digital payments

It’s still early days when it comes to the ‘digital economy’ and yet I’m sure you agree that the rate of change is daunting. 

I must admit it’s exciting to be an innovator in e-commerce, an area that will continue to have transformative impacts on the way we live and work. 

From my comfy leather seat in Auckland, it’s easy to forget that from a global perspective e-commerce has a huge influence on how future economies develop, such as those in the third world. Online payment trends in various countries are so different, and it’s really intriguing to me to see how developing countries are early adopters in some of the most innovative emerging technologies. 

In India or many African nations for example, consumers are using mobile solutions when they don’t even have bank accounts, let alone a debit or credit card. 

United Nations report on ‘The Information Economy’ 

The United Nations recently released the ‘Information Economy Report 2017: Digitalization, Trade and Development’ (check it out here). 

A lot of it was fairly dry, I must admit, but it also made for essential reading from where I sit. Not just as a payments solution provider, but as a business professional. 

António Guterres (UN Secretary-General) says the report’s purpose is to provide insights and resources, ‘so the international community can reduce inequality, enable the benefits of digitalization to reach all people and ensure that no one is left behind by the evolving digital economy’. 

And most pertinent to me in my line of work - the report says that online, mobile and digital currency payment systems are set to overtake credit and debit cards as the most popular ways to pay in e-commerce worldwide by 2019. Compelling food for thought for the global finance industry as well as policy makers

Of course, these figures are heavily skewed by developing nations, which are not anywhere near as reliant on credit and debit solutions, like we are. But it’s still interesting to see that in line with other studies conducted mainly in the US (for example, this one), the reliance of credit and debit cards is predicted to slow down in the western world. 

What does this mean for your business? 

It’s a no-brainer that it's still essential to provide credit card payment options on your website, and it will be for some time to come (check out our blog on the ‘Top 8 Methods for Accepting Online Payments in New Zealand’). 

But as the need for credit/debit alternatives grow, and trust and awareness builds with solutions like POLi, and the growth of Digital Wallet options increases, you’ll need to keep abreast with what’s going on in the global payments sector to make sure you’re meeting customer expectations. 

Growth of the ‘Digital Wallet’ 

This is a term we throw about in the payments industry quite a bit, but it covers a lot of bases. It may be worth offering some clarity. 

The term ‘Digital Wallet’ is essentially just a device that allows you to make electronic transactions. It’s more commonly referring to the use of a smartphone to purchase something via an app, whilst you’re on the go. Also termed a “mobile wallet”. 

With a mobile wallet solution you can simply tap your phone to a digital payment-enabled terminal at participating merchants when you’re buying something. It uses what is called a Near-Field Communication (NFC) chip, (the same technology that lets you use contactless payments such as “Paywave”), that’s securely hooked up to a bank account or credit card. 

So at the petrol station for instance, you might simply tap your smartphone to a compatible checkout register to pay instantly at the counter. (How great would it be to be able to lean out your car window and do this at the pump?). 

It’s pretty compelling technology for consumers because its so darned fast. Plus it has the obvious benefit of putting an end to physical wallets. I carried out a very scientific ‘wallet audit’ for the purposes of this article, and was surprised at the stuff congregating within. Credit, debit, EFTPOS cards, gift cards, loyalty cards, receipts – not to mention photos and scribbles I can’t make sense of. Some mobile wallets in the US will track your gift and loyalty cards as well, so you don’t need to carry these around for months and forget about them like me. 

According to ANZ – merchant benefits of this technology are that your customers spend less time in queues; less chance of customers going elsewhere, and there’s reduced cash handling and reconciling. ‘The device remains in your customer's hands and the card number is not stored on the device or your systems – improving security and giving your customers reassurance’. I’m thinking of small businesses too, who will have a cost-effective and quicker way to collect payments on the go, without having to take the larger leap into using merchant credit facilities or issuing invoices. 

So why is it taking so long for Digital Wallets to take off in NZ? It seems to be taking a while for the banks and tech companies to work out what’s best for the future. One of the big questions has been whether banks partner with external providers (Samsung, Apple etc) or whether they build their own apps. 

Over the ditch, Commonwealth Bank, Westpac, and National Australia Bank have got together and recently announced they are launching their own payments app. ‘Beem’ enables users to make instant payments using their smartphone, and request payment from someone who owes them money and split bills. More features will be added soon. 

Yet ANZ Australia has chosen to partner with Apple Pay – and recently launched it at ANZ here as well. And Westpac NZ have partnered with Samsung Pay. 

It will be interesting to see how this all unfolds! 

What does this mean for your business?

The growth of mobile wallet use shouldn’t keep you up at night – but do keep an eye out, especially if you offer in-store payment solutions. 

Things will certainly change in the next few years if not sooner, thanks to the banks finally making some decisions. 

Right now in NZ, you have credit card and POLi facilities on your website you’re well covered. 

Oh – and just keep an eye on those Millennials - the largest customer base when it comes to online shopping. They are hyper-connected, well educated on e-commerce trends, arguably more trusting and savvy about online payment mechanisms, and they don’t own credit cards. And of course, they all have mobile phones. 

Change is inevitable. 

By Popular Demand POLi is Now Available on Shopify

Over the last year loads of merchants have asked us when we are going to support Shopify with our payment option that lets customers use their own Internet Banking. 

Well, we're delighted to announce our new partnership with Shopify formally starting in July 2015. So, if you’re a Shopify website owner (or are thinking about becoming one) make sure you select POLi as a payment option on your storefront. 

Want to know more? Read the post below to find out how to set up POLi in your Shopify store and how much it costs.

Already convinced? Click here to sign up now

 Click to Tweet: Shopify retailers can now use POLi in their stores. Credit cards no longer a must have!

Benefits of using POLi with Shopify

1 Get more transactions from customers who prefer to use their own money or don’t have a credit card

2 Pay less per transaction versus other payment options

3 Remove the pain of matching direct bank transfers with online banking payments

4 POLi is very easy to set up and install in your Shopify store – it’s a 2 minute job

Get more transactions through your Shopify store with POLi

POLi is a secure, effective, and user-friendly way for your customers to pay for purchases online without using a credit card. Many major companies, small businesses and untold consumers trust it every day to complete thousands of transactions.

Despite there being massive growth in online shopping in New Zealand, up to a third of adult New Zealanders don’t own (or want to use) a credit card. Even being conservative, this amounts to a decent slice of the 4.6 million residents in the country3So, by offering POLi, Shopify merchants can tap into a potential gold mine of additional sales.


Get more sales but pay less

Shopify offers credit card payment solutions via an impressive array of payment gateways. However, payment gateways come with significant fees and a heap of hoops to jump through.

POLi is different. As you’re not dealing with credit card schemes, there are no surcharges and you only pay for completed transactions. Also, POLi doesn’t charge retailers set-up or service fees.

POLi transaction fees are only 1% of each transaction value plus GST. This is an extremely competitive rate and it’s capped at $3.00 per transaction! 

How does POLi’s costs compare?




Set up

Transaction Fee or MSF

Payment Gateway (per tx)

Monthly Service Fees


(full solution*)


3.4% + $0.45 (USD ?)



Credit Cards


4% - 6%

$0.15 - $0.25

$25 - $60



1% (capped at $3)





1.2% (capped at $3)


$25 - $60 **











See more at about how much you should expect to pay with an online payment system.

Offer direct bank transfers online in 4 simple steps


Do you offer credit terms or direct bank transfer payment options in your Shopify store? If you do, you’ll be used to manually reconciling all those direct bank transfers – and what a pain it is! 

1 Simply set up your POLi account

2  Install POLi in your Shopify store

3 Whenever a customer chooses to pay with POLi they will be taken directly to their Online Banking to complete the transaction.

4 You receive the money and ship the goods.

How Can I Offer POLi Payments in my Shopify Store?

As a business owner, we know that your time is precious so signing up with POLi is quick and easy. We have streamlined the process into a few simple steps:

1 Apply for a POLi Merchant Account. It is far easier than the approval process with credit card companies. Click here to apply.

2 Once we have provisioned your account, we'll send you some simple instructions. Set up only takes a few minutes.

3 Log into your Shopify store and install POLi.

You don't need to be tech-savvy to start using POLi

Getting set up with POLi and installing it on your Shopify site is easy! We’ve made our processes as straightforward as possible. And, our friendly technical team is on hand to get you up and running in no time.

When you combine this with Shopify’s ethos of simplicity, POLi and Shopify really are a winning combination.

Our Shopify store owners are loving POLi

“I feel confident that the option to have POLi on our website makes us different from our competitors. I think our customers really respect that we have this option as well as they now have a quicker and easier way to pay.”

Laura, Owner & Founder, magichollow

A great example of POLi and Shopify in action is the retailer magichollow, an online vintage clothing store- specialising in on- trend, unique products.

Their target demographic is teenagers in the 14 – 18 year age bracket many of whom do not have a credit or debit card. This meant they had to manually reconcile most of their online sales payments which was time consuming yet vital to their business model.

So using POLi as a payment option in their store was an absolute no-brainer that has saved them time, money and offers their customers a better checkout experience.

Read the full case study here.

Are you new to Shopify?

If you’re new to Shopify and what it has to offer, here’s a quick rundown of some of the best bits.

Shopify tools

Image Credit:

Image Credit:

  • Track orders and manage inventory with ease from day one.
  • Easily optimise the shopping experience on any number of mobile devices.
  • Present your products in the best light with pictures, zoom function, and a photo gallery. It also adjusts its views depending on what device the customer is using to view your page.
  • Retrieve lost sales with easy to use cart abandonment. This will later notify shoppers via email that their selections are still available for purchase and waiting for them.
  • Straightforward management tools for calculating taxes and shipping rates.

How Do I Set Up My Shopify Storefront?

There are many free default ‘themes’ that can help you create a super functional and aesthetically pleasing storefront when you sign up.

These can be easily customised by adding your logo, colours, fonts, etc. Shopify Experts can help you take it to the next level by creating something unique for you and your products or services. This does cost more but can be a better deal than hiring an outside consultant to set up something similar for you.

Click here for more information about their storefront options.

So, do you want to get started?

Hopefully the benefits of using POLi in your Shopify store are clear. By offering your customers a non-credit card payment option, you could get more transactions at a lower cost and remove a ton of unwanted admin to boot!

1 Sign up for POLi now by clicking this link

2 Get in touch if you need help with anything

If you already have POLi and want to set it up on your Shopify store, read these instructions.

Until next time,

Jeff Skidmore

Director, POLi


Showcase: magichollow blazing the way on Shopify

We love to showcase fantastic New Zealand websites. With the launch of the new POLi payment option for Shopify, there's no better place to start than with magichollow

magichollow was one of our first merchants to trial POLi in their Shopify store. Their target demographic are teenagers in the 14 – 18 year age bracket many of whom do not have a credit or debit card. This meant they had to manually reconcile most of their online sales payments, which was time consuming yet vital to their business model.

So, using POLi as a payment option in their store was an absolute no-brainer that has saved them time, money and offers their customers a better checkout experience.

Want to go shopping now? Click here.

Read magichollow's story told by its founder, Laura.

Online vintage magic was born in 2012

I started selling vintage clothing when I was 14 on trademe as a way of earning pocket money. After working in minimum wage office jobs and studying a communications degree that I was not interested in, I realised that there wasn’t much point continuing to be uninspired by what I did. So in January 2012 I started magichollow, an online vintage clothing store specialising in on-trend, unique products. 

"I'm Laura. I hand curate every single item you see on magichollow. I will literally search anywhere for the coolest, most unique vintage and it all ends up here. I have the best job ever."

Laura, Owner & Founder, magichollow

Meteoric rise on Facebook

I started magichollow on Facebook and we grew through word of mouth and advertising for 2 years. We garnered over 14,000 likes on Facebook and built up a wickedly loyal base. Our customers were predominately in the 14-18 age bracket looking for the kind of fashion that wasn't readily available in NZ. 

The move to Shopify

When we first started out on Facebook, customers would comment “sold” on the photo of an item they wanted to buy. They would leave their email address which I would respond to with t&c’s and also my bank account details. However, there was a major problem with this payment system. Customers would often comment "sold" on something but then not get back to us. This left the product unavailable for a period of time when other potential customers could buy it. And even when customers did follow through on the purchase, I still had to go backwards and forwards into my Internet Banking to check when the payment had been made.

This was creating a loss in revenue, confusion for our customers and drowning me in paperwork! Something had to be done.

So, I decided to research ecommerce website solutions. And, because many of our customers did not own a credit card, I knew that having a bank deposit feature was hugely important for the transition of our customers from Facebook. 

How POLi helped

One weekend, when paying for the Northern Gateway toll, I saw the option to pay via Internet Banking using POLi. This excited me as I knew this was the payment solution I was looking for. I sent POLi an email the next day and immediately had a response explaining how the system worked and that a plugin-in for Shopify was in the making. 

The timing worked out perfectly as the beta testing for POLi became available just as we were planning to launch the website. Creating a seamless transition of payment methods for our current customers was hugely important and POLi made that happen. 

POLi is great because it means no one misses out. It's extremely easy to use and our customers have had no problem figuring out how complete the transaction on their own. 

I feel confident that the option to have POLi on our website makes us different from our competitors. I think our customers really respect that we do have that option as well seeing as it was the only way to pay when we were just selling on Facebook. 

Right now 20% of our sales are through PoliPay, with more expected as we continue to promote and push customers to use that option. 

Ready to go shopping?

If you're looking for something new for your wardrobe, visit magichollow today.

Web:             Facebook

Interested in using POLi on your Shopify Store?

Just like magichollow, by offering your customers an Internet Banking payment option, you could get more transactions at a lower cost and remove a ton of unwanted admin to boot!

1 Sign up for POLi now by clicking this link

2 Get in touch if you need help with anything

If you already have POLi and want to set it up on your Shopify store, read these instructions.

Until next time!

Jeff SkidmoreDirector, POLi

Build a website and start selling online in hours!

Not a week goes by that I don’t receive emails from prospective customers asking me how they can get an online shop up and running on a shoestring. Does that sound like you? Then read on.

Start Selling Online with POLi & Website Builder for only $25.00 per month: Click to Tweet

Years ago, unless you were ready to pay thousands of dollars to a developer, a customized e-commerce website was out of reach for most small businesses and start-ups. How things have changed! Fast forward to today and there are many savvy do-it-yourself template website services available. While they can all provide you with a presence on the web, some are better than others.

What to look for in an affordable e-Commerce solution

If you want to own an online shop but have minimal money to invest and no website development/design experience, you need two things from your website:

1. It has to be simple to create. In fact, you need to be able to set up a professional looking website on your own with no development chops.

2. It has to be able to easily accept multiple online payments methods with no customisation.

Point two is particularly important as not all template-style websites allow you to easily accept payments.

Here’s an example.

A friend of mine was recently talking about her efforts to create a small online business selling her custom sleepwear. She had thought that she was through the “hard part” by designing the clothes, manufacturing inventory, creating a brand and planning for distribution.

It turned out the thing that had her pulling out her hair was finding an out-of-the-box website that enabled her to get up and running selling her products quickly with minimal customisation and development.

As a small start-up, she didn’t want to pay mega bucks to have the site built for her. So, she ended up muddling through on her own using a well known template-based site.

As an entrepreneur, new to the online world, she had no idea how fiddly it could be to set up credit card payments on a website. And how much it would slow her progress. While she’s now on the road to success with her business, I wish she would have known there‘s an easier way.


Here at POLi we not only work with major corporations - we also champion the small business owner. We love watching them thrive and succeed. We provide the tools and resources that will eliminate “virtual” hurdles and get your business up and running online.

We are proud to partner with Kiwi business, Website Builder, which currently helps thousands of businesses shine online. Using POLi, a business owner can sign up with Website Builder, complete a domain registration and get their website online almost instantly, without a credit card.

As experts in the field, we asked them what you need to know to get started with your online store and how they can help.

1. Create Your Site

You can DIY! With Website Builder, you can create your own online store in hours (minutes actually). It's easy, it's fast – and it’s cost effective. And, because Website Builder uses POLi, you can sign up almost instantly, without a credit card!

2. Show Me the Money

Using POLi in your website builder store, your customers can buy your products online and then quickly and easily deposit money straight into your bank account. (This is particularly important if your business needs access to the funds in ‘real-time’.)

It’s also a great alternative to simply receiving credit card payments, which can be expensive and time-consuming to set up.

3. Improve Your Rankings

When Google is calling you want to answer first. Your Website Builder site comes stacked with uncomplicated built in tools to help you optimise your website. So, when people search for a product or service similar to what you offer, you’ll be closer to the top.

4. Domain Name and Hosting Services

They take care of your web hosting and domain names for you. You can register domain names for only $19/year via the control panel for .nz. They can help with international domain names too. All web hosting plans include free web statistics and free email accounts. Web hosting plans start at only $15 per month.

5. Market, market, market! 

Communication with customers is key. Newsletters and bulk email services will keep you in touch to do things like announce sales, offer incentives and promote contests. Website Builder can make it all happen.

6. Web-based inventory management:

Their web-based point of sale (POS) system is perfect for managing your showroom or call center via and Ipad or Desktop. You can have unlimited instances of the POS system across devices, and staff activity is tracked. All POS instances have access to the same order history. Backorders and disappointed customers will be a thing of the past!

So what are you waiting for?

Every week we get enquiries about how to start an online business. We can help them with the payment piece, but first they need a web presence. If they fit the criteria we send them off to Website Builder. Their templates are professional, easy-to-set-up and cost-effective. Best of all, you don’t have to be a super technical person to make it work- you can do it!

As with POLi, Website Builder is here to help. Give them a call today to chat about the right package and pricing that works for you and your business.

Get in touch –

Over to you

What did you think of this post? What are your experiences of building your own websites? Leave your comments below.

Jeff Skidmore

Director, POLi

What happens if a customer cancels a payment via ANZ?

What happens if a customer cancels a payment via ANZ?

Most NZ banks do not allow customers to cancel payments processed via Internet Banking. This means that there is usually little likelihood of a payment being reversed after the POLi system has confirmed that a payment has successfully completed. ANZ is the exception to this rule, and although you are still highly likely to receive payment you need to be aware of the risks of accepting ANZ payments

Read on to find out how this affects POLi merchants.

How are payment cancellations usually managed by the bank?

Banks in New Zealand don’t accept instructions to transfer funds unless there is every likelihood the payment will be made. So, when a payer confirms an Internet Banking payment they are making a final instruction to their bank to transfer funds to the payee. Therefore, as a POLi merchant, you should have every expectation that you will receive payment (subject to the normal bank terms and conditions, prioritisation and settlement processes).

The process is different for ANZ payments

UPDATE: 15 September 2016

ANZ no longer allows customers to cancel payments on the day of payment.

ANZ allows its customers to cancel Internet Banking payments on the day the payment instruction is received up to the time of the banks’ end of day. This is typically in the late evening. This Internet Banking functionality affects a small minority of POLi merchants as they can receive advice from the POLi system that a payment has been processed via ANZ but the POLi system is unable to advise you (the merchant) that a payment has been cancelled.

Find out more about ANZ’s Internet Banking service here.

So what does this mean for POLi merchants?

In practice the risk of payment cancellation appears to be very low. The risk does exist however so you should assess it according to your particular situation.

Current POLi merchants who are providing post paid goods or services (or pre paid services that can be revoked by the merchant) are typically unaffected by the issue as it’s handled by their current debtors processes.

If you are a merchant who is providing prepaid goods or service, you should consider the following options:

  1. Accept that the risk of payment cancellation is low and allow payments from ANZ customers. Reconcile regularly to track potential issues with payment cancellation.
  2. Allow payments from ANZ customers but implement business processes to ensure the funds are received prior to provisioning the goods or services.
  3. Do not accept payments from ANZ customers if there is insufficient time for the funds to clear.
  4. Do not accept payments from ANZ customers at any time.
For most POLi Merchant customers, payment cancelations are not a real issue. If you do come up against any difficulties though, remember to get in touch.

The POLi team

Mobile Commerce and what it means to your online business

E-retailers simply can’t afford to ignore the mobile world anymore. If you have a website and it's not fully functional (and that includes online payments) on a mobile device (smartphone, tablet or fablet) you have to question whether your website is truly effective as a business channel.

Whether your website is brand new shiny out of the box or has been around for a few years, you can’t afford to take your eye off the world in which New Zealand’s online consumers are living. We live in fast, connected, mobile-enabled world and if your website isn’t part of it, you’re going to lose out.

Life is getting faster and people’s shopping habits are following suit. People shop online between doing other things (when shopping used to actually be the ‘thing’ they were doing). Whether a spot of online shopping is squeezed in on the bus to work, on a tablet while watching Sky On Demand or on the sly in the office when the boss isn’t looking, one thing is for sure: businesses that can’t keep up with the pace are going to lose the race.

2 out of 3 Kiwis now have a smartphone

2.7 million New Zealanders now have access to a smartphone (and probably a tablet as well). Do you honestly think they aren’t using these devices to shop? Clearly they are and the fact that all the leading subscription-based ecommerce platforms (Magento, Prestashop et al) are making responsive websites the norm (more on this below), just goes to show that the big boys are taking this pretty seriously. 

But what about the smaller Kiwi e-retailers? How do they step up to the plate?

The options

Depending on your budget and appetite for change, there are two main options for online stores.

Mobile eCommerce

The simple explanation.

Mobile eCommerce sites are often smaller versions of their desktop counterparts with fewer products and slimmed down functionality (eg cross sell widgets don’t feature). ‘Smaller’ in this context means less - of everything: less functionality, fewer products, fewer options, fewer pages, no advertising etc. 

From an administrative point of view this could be a winner. You just need to create a mini version of your website (cheaper than a full rebuild) and there are less pages to curate. However, the flip side of the coin is that your customers might not get exposure to all of your products, offers and specials which isn’t necessarily all that great!

Mobile websites are certainly better than nothing. But what we are interested in is responsive websites. And for good reason.

Responsive eCommerce

Responsive eCommerce is the best option because you only have to build and manage one website (rather than two) and because it will function perfectly on all mobile devices. The shopping experience is also optimal and allows customers to flit between desktop, tablet and smartphones (which they will do during the shopping process). Who wants to find a product on a desktop, save it to their wish list only to return later on a mobile phone to discover the wish list option isn’t available?

Responsive eCommerce is faster, easier to administer, costs less to maintain and offers an far better shopping experience than mobile eCommerce. It really is a clear cut winner.
How will responsive eCommerce impact my online sales?

67% of online shoppers are much more likely to purchase from a shopping site that works well on a mobile device. I would be prepared to place bets that very few consumers would be happy to complete a transaction end to end on their mobile if they have to use the desktop version of the site. 

A working example of this is with Trademe. This is a monster of a website, crammed full of products, prices, promotions you name it. Yet, it works like a dream on a smartphone. Consider the lost sales if they didn’t invest in making a mobile version of their site? 

So, go responsive or go out of business

Whether your website is a bedroom business or an international superstore (or both!) don’t put off mobile eCommerce. More and more New Zealanders are shopping online on smartphones and tablets and if they find your site, what will they see?

The POLi team

The Rise of Online Shopping in New Zealand

Online shopping is becoming increasingly popular all around the world, but the tide of change feels like it has taken its time to reach our shores.

Well no longer. It’s fair to say that online shopping has truly taken off in New Zealand with the rate of adoption picking up speed each and every quarter.

Looking back a few years, it was very difficult to find international clothing brands outside of a very few fashionable stores in Auckland. Take for example, the extremely fashionable line of ‘Next’ clothing from the UK (a popular but mid-market brand) which was for many years only available from the super-trendy ‘The Department Store’ in Takapuna, Auckland. 

Today, Next clothes are available direct from the UK online via as well as being available in New Zealand via

The impact on New Zealand Retailers

According to research published by MYOB in July 2013 around a third of NZ small and medium sized enterprises (SMEs) operated a website. When you consider that over 80% of New Zealand businesses are categorized as SMEs, it shows the potentially devastating impact that international competition could have on our home retailers.

Traditional ‘bricks and mortar’ businesses that have been slow to embrace online shopping have suffered (and will continue to do so). By resisting investment in online channels, they have simply been unable to cater to the rapidly changing demands of savvy online shoppers. 

Even retailers that have been in business for decades and have built up a loyal customer base are feeling the effects of online shopping in New Zealand. One increasingly popular practice among customers involves examining and comparing instore and then once a choice is made purchasing that product online, often at a cheaper price. The stores manage to display the products that the potential customers would want, but they don't get any business from them. Functionally, they are displaying them for free and for the benefit of the online retailer. The reverse is also true as well (research online, buy in store), but as Kiwi's become more comfortable with online purchase we predict the former will become the dominant practice.

Customers leaving stores without purchasing anything that they've examined or tried on has always happened, but it is now common enough to be a national trend in New Zealand. Boutiques that operate locally and do not stock international brands are most likely struggling the most.

However, the change in consumer buying behaviour has allowed many smaller businesses to open online-only stores and run businesses with much lower overheads than traditional high street style shops. This has allowed them to compete with much larger businesses and remain profitable.
So, bad for some and good for others. 

So what’s the bigger picture?

It is still very much the big international brands that dominate the online shopping landscape in this country and, ironically, this could be protecting NZ businesses to a certain extent. 

But, whilst the sentiment that causes New Zealand consumers to ‘only buy Kiwi’ is still very much there, I believe it is really only apathy and nervousness on the part of the New Zealand shopping public that stops them from fully embracing online shopping regardless of where the retailer is based. 

There will come a time very soon where it is totally acceptable to order clothing (or anything for that matter) online from a company based in UK, that accepts payment in your local currency, offers cheap delivery within days and free returns.

But we don’t appear to be there yet.

Online Shopping and the Generation Gap

If we interrogate the data a bit more keenly, what we see is that the highest percentages of online shopping adoption is taking place with teenagers and people in their twenties. These demographics typically have lower disposable income than people in their 30s, 40s and 50s and therefore the impact is yet to be truly felt. 

I say ‘yet’ because it doesn’t take a huge amount of deductive reasoning to figure out that this trend is only going to grow. These young people will get older and will have more money to spend and more younger people will enter their teens to fill the ranks of active online shopping fanatics.

Buy why the generation gap? 

Some marketing analysts predicted the rise of online shopping over a decade ago, but attitudes about the Internet did not advance fast enough. For many of the older individuals that operate shops in the first place, online shopping is a very new and surprising cultural change. 

However, with the younger generations, the Internet has always been part of their lives. They aren’t called “Digital Natives” for nothing. 

And it is the loss of business from these people - under the age of thirty-five - that is particularly troubling for many Kiwi retailers. Younger people form one of the most important demographics for many retailers so if they are radically changing their spending habits, retailers will have to adapt.

Shopping online for a bargain

Kiwis love a bargain, and many now recognize that online shopping is often more cost-effective than shopping in person. Online retailers don't have the same overheads as bricks and mortar businesses so they can charge less but still make a profit thus attracting the thrifty shopper.

However, I predict that this behaviour will change over time. As more and more people embrace the Internet as a medium for shopping, the emphasis on price as the determining factor will lessen. People will gravitate towards online shopping as standard rather than as a cheap alternative to going to the high street.

So what about luxury items?

The more boutique stores that operate in the luxury market will have to find ways of projecting the quality of their products in an online environment. Just like they do in their physical stores. Adjusting their prices down, rather than investing in new channels, could be a fatal mistake. 

Technological and Economic Changes

The New Zealand dollar has stayed surprisingly strong in the wake of the GFC which has made it more affordable for New Zealanders to buy products from overseas. (Just think, the GBP was 3 - 1 against the NZD only 6 years ago and now it’s 2-1.) 

Meanwhile, online shopping websites have become easier to navigate and more ubiquitous with the widespread marketing of popular eCommerce platforms like Magento and Shopify. Add to this, the widespread use of smartphones and social media and you have a ready made market of consumers demanding an alternative to putting on their shoes and going to the nearest mall. 

People are online all the time now and levels of accessibility to the Internet (and therefore online shopping) has never been so high.

It is no surprise that online shopping in New Zealand has nearly doubled in the last five years. The future of traditional retailers in New Zealand is uncertain at present. 

Hopefully, they will rise to the challenge and get onboard. 

The POLi team

Credit card surcharges - New Zealand’s sleeping giant

The NZ Herald reported back in 2013 a rising tide of discontent amongst New Zealand consumers objecting to credit card surcharges when paying for goods and services online. 

You can read the full article here.

As well as being thorny, this topic is also contentious. Firstly, New Zealanders have been relatively late in adopting online shopping en masse (and so many haven’t had call to get peeved about the issue), but also because retailers have so far justified their charging the surcharge as simply “passing on the credit card fee” that they are charged by the credit card schemes. 

So, it seems that a sleeping giant has awoken in NZ and retailers large and small are now feeling the pressure to remove the surcharge or work much harder to justify it. 

So what does this mean for online retailers?

Well, in the short term, nothing. But online sales are on the rise in NZ (with 1% growth quarter on quarter) and those retailers looking to grab their slice of the online shopping pie need to take this change in consumer sentiment seriously.

As an online retailer, you essentially have four main options (not including mobile payments which is a story for another post) when it comes to accepting payments online for your goods and services:

Send invoices to customers when an order is made.

Sending out invoices to your customers upon completion of a transaction is still a very common practice. However, in our mobile enabled world, where you can download an app onto your smartphone in seconds, consumers normally want to complete a transaction there and then. 

(This doesn’t apply to accepting online payments in arrears for services rendered however. If you send invoices to clients by email, you could use POLi Link  as a means of receiving direct payment faster.)

Accepting bank transfers as payment by publishing your bank account details

This is still fairly common place in New Zealand (especially for retailers who sell on Trademe). However, it is also time consuming to reconcile the payments, especially when the payer doesn't provide the correct reference information, and there is always the potential to ‘lose’ the sale if the customer has a change of heart after checking out but before making the Internet Banking payment.

Accept credit card payments online

Of course, most e-retailers accept credit cards (although not always American Express) as a payment option on their websites. 

But of course, with credit cards come transaction fees and, as a retailer you have to make the call as to whether you pass on those costs as a surcharge, or somehow build them into the price of your products and services. And this is where the current issue lies.

Accept direct bank transfers with POLi

The fourth option is to accept direct bank transfers. How is this different to option number 2? Well, the key to this payment method is that the entire transaction takes place online at the time of purchase. 

This has a few important benefits:

it is convenient for the customer as they don’t have to wait for an invoice, go to their internet banking, make a transfer, notify the retailer that they have made payment and wait for a response. They just make the payment right there and then;
the possibility of the customer changing their mind is significantly reduced;
the administrative burden for the retailer is far, far lower (in fact, no different to accepting credit card payments).

One million adult Kiwis do not own a credit card

To add to the confusion as to which payment options to offer consumers, there are still over a million Kiwis who do not own a credit card

What this means in practice is that as more and more New Zealanders migrate to online shopping, e-retailers are going to have to offer more payment options than credit cards alone.

And remember, those New Zealanders that do have a credit card don’t like paying a surcharge for using it (and don’t get me started on Visa Debit cards!). So what we have is a melting pot of consumers who want to buy online, with or without a credit card and with no transaction fees. 

Tackle the sleeping giant head on

So, as the credit-card-surcharge debit heats up and the sleeping giant is beginning to stir, it will fall upon NZ e-retailers to make some important decisions about how they run their businesses. If the Commerce Commission scraps the surcharge rule (and they might - who knows?), we will need to think more holistically about the payment options we offer our customers.

Many consumers will want to pay by credit card (or Visa Debit) regardless and it is down to the retailer to review their business models to see if they can absorb the costs from the facility providers. 

For those retailers who simply cannot do this and remain profitable, the obvious solution is to implement a direct bank transfer online payment system into their online store. You might be surprised to find that this is not only extremely cost effective, but also very easy to do (even for the non-techie website owners).

In fact, given there are a million Kiwis who will at some point in the near future start shopping online, I would say that a non-credit-card payment option is a must for all New Zealand eCommerce stores.

The POLi team