Conversations within my various editors' groups occasionally turn to ways of accepting payments from clients. You get the conversations about using PayPal and similar services. There are the conversations about payments in cash. You get those hilarious conversations about clients wanting to pay via a royalty share, complete with boasted claims that the royalty share would be worth millions.
But whenever the conversation turns to clients paying by check, the group is often amazed by my response.
As much as checks might be nice for some people, I can never accept payment via check. No bank within New Zealand will allow you to deposit checks anymore. Even cashier's checks are now a thing of the past.
There is normally one person who asks how we pay our bills if checks are no longer accepted, likely assuming that we pay for everything via cash. But my answer to this question tends to shock them even more.
New Zealand has become a near-cashless society. Everything is paid for by way of electronic transactions, most of which occur via internet banking.
The experiment known as eftpos
It all started as an experiment in the early 1980s. ATMs (automatic teller machines) had taken over, and in truth, I don't remember a time when ATMs weren't around. As a child, I often witnessed my mother putting her bank card into the machine in the wall, getting cash out.
But soon after my parents and I arrived in New Zealand, eftpos was everywhere we went.
Eftpos stands for Electronic Funds Transfer at Point of Sale, and for those who have never used an eftpos machine… Seriously, where do you live to never have used one?
It turns out that eftpos was first introduced in New Zealand in 1985, initially only available at petrol stations. But in 1989, the system was launched to major retailers and grocery stores. Today, if a store doesn't offer eftpos as a payment option, they're missing out on a huge sector of potential sales; hardly anyone carries cash anymore.
During the height of the pandemic, we were cashless.
Back in April 2020, during the height of the pandemic, when the whole of New Zealand was in what we call Level 4 lockdown, New Zealand became fully cashless. Grocery stores stopped accepting cash, insisting that everyone use the eftpos systems—on the recommendation from the government. And if you had Paywave, even better. Just wave your credit card over the system, and no PIN number is required for transactions over a certain limit—and the limit was increased during that time to in the order of $300.
We are used to it. This is our life. Our children won't remember anything different.
Not all transactions are via eftpos purchases. Internet banking has taken over, with some banks now offering the ability to pay people using their cellphone number. (I was shocked by this one myself, but I'll get to that.)
I don't remember exactly when it happened, but rent payments went by way of direct credit payment many years ago. All you need is someone's bank account number and you can pay them via internet banking directly into their account. If they bank with the same bank as you, payments are instantaneous. If they bank with a different bank, it can take 24 hours.
And you could set up automatic payments to pay a set amount to a given account regularly. This was how my parents paid their rent. It was how my husband and I paid rent back in the day when we were renters (over 16 years ago).
Then came in direct debit payment, where you sign some paperwork giving authority to a retailer to take the money from your account for themselves, perfect for those bills where the amount varied each month.
If I recall rightly, my first usage of direct debit was for the rates bill, after I had forgotten to pay it on time and was charged a big late fee… for the third time. Now I use direct debit to pay the phone, power, insurances, Netflix, Audible subscription, and other subscriptions. And the bills that aren't paid via direct debit are paid via direct credit or credit card. Even my taxes now get paid via internet banking.
Now, I can hear all the Americans whispering into the void about the possible dangers of such a system, but our banking regulations do specify that a paper trail needs to exist when such payments are authorized. I'm not saying that there aren't flaws in the system, because if someone really wanted to be a thief, they could, but I trust it enough to not stress about it.
The evolution of internet banking
I hinted above how some banks are now offering for people to pay others by way of cellphone numbers. Well, it was an ad on a billboard located just outside my daughter's high school. "You own a friend money? Pay them using their cellphone number."
But in my little Google search, it turns out that the feature is now available from two of the major banks in New Zealand. It won't be long before the others offer it, too.
I have no idea how the system actually works and whether it means that our bank accounts need to be tied to our cellphone numbers, or if we get a txt message that says we need to click a link to claim the funds.
In truth, this particular idea does scare me, because I can see how it can go horribly wrong—quickly. But like everything else within the internet banking world, it's a natural progression and will probably eventually take over.
Working on an international level
Because I'm so used to internet and electronic banking, it never entered my mind that there might be an issue with getting paid by overseas clients. When I started my editorial business, I did a tiny amount of research on the best options available at the time, then set up PayPal—and off I went. I have since set up an alternative option, but PayPal is still my primary method of getting paid by clients.
I struggle to fathom how such a tiny, sometimes-technologically backwards country can be well ahead on embracing this type of technology compared to the USA (a self-professed, technologically advanced society). It's not like it sprang up out of the blue. Eftpos has been around since the early 1980s and the concept of direct debit/credit has been around for decades too. I have been using internet banking to pay my bills since the early 2000s.
I'm shocked to hear that some editors are still being paid with checks. Though, it is my understanding that bank fees associated with internet banking in the US are ridiculous, making the option an unattractive one.
But this is the future. Eventually, cash will be a thing of the past. I guess New Zealand and its near-cashless methodology will just need to lead the way into the cashless frontier.