Woolworths launches new payments system Wpay

Woolworths is taking on banks and fintechs with Wpay, using its own billions of transactions to help offer a platform to other businesses.

Brad Banducci, left, and Paul Monnington, launch Woolworths’ Wpay system.

Woolworths is diving into the high-growth fintech sector, launching a new stand-alone payments system called Wpay that aims to leverage the supermarket giant’s network of check-outs that make it the fifth largest processor of card payments in Australia.

The system will provide a payments infrastructure for independent retailers who want to buy it and use it for their own purposes, but will not affect Woolworths’ own customer transactions.

The launch of the new service for other retailers and businesses means the supermarket giant is taking on the nation’s $500 billion-plus payments and clearing sector, as well as the big four banks which dominate the market for transaction services.

The venture is part of chief executive Brad Banducci’s strategy to create a “retail ecosystem” around the supermarket group and its retail businesses, drawing greater value from billions of transactions at its bricks and mortar stores and on online platforms.

Wpay will draw on Woolworths’ national scale and capability in payments to offer payment solutions to merchants outside the supermarket group. It will mean businesses outside Woolworths can use the Wpay system rather than developing their own, or buying another platform off the shelf from a provider.

It will leverage Woolworths’ reach as the fifth largest processor of card payments in Australia, ranking it outside the big four banks, with 1.3 billion transactions annually worth more than $50 billion.

The proposed separation of Endeavour Group from Woolworths, set for later this month, will see Wpay become the payments provider to BWS and Dan Murphy’s. WPay is already the payments provider to its sold-off fuel station business EG Australia.

“As Australia and New Zealand’s largest retailer, we’ve been investing in leading-edge payment capabilities to service our retail businesses for many years,” Mr Banducci said.

“We believe there is value in extending the benefits of the investments we’ve made in our payments platform to other merchants who may not have the scale to build it themselves.

“Payments are an increasingly important part of the shopping experience both in-store and online and we bring unique expertise to this space as retailers.

“We’ll continue to invest in our platform to unlock the best possible experience for our stores and merchant partners.”

Wpay will offer Australian merchants a comprehensive payments and commerce platform, including integrated in-store and digital payments, supporting traditional card payments, digital wallets and alternative payment methods, payment services including transaction processing at scale and rapid funds settlement and simple reconciliation.

It will also feature fraud management, detailed reporting and merchant analytics and gift card program management including sale, redemption and distribution partnerships.

Paul Monnington, currently Woolworths general manager of fintech, has been appointed the managing director of Wpay. Prior to joining Woolworths, he worked extensively in financial services for large banks and software companies including NAB and Oracle. He also consulted to the financial services sector with Deloitte and PwC.

“It’s an exciting time in the world of payments with new technology driving better experiences for consumers. Wpay enters the sector with a strong Australian pedigree serving high-volume retail brands across food and grocery, fuel, liquor, hospitality and e-commerce,” said Mr Monnington.

“Aside from payments, we know merchants are also looking for simpler ways to integrate gifting, loyalty and direct marketing platforms to engage customers while maintaining direct relationships. We look forward to partnering with merchants to help bring this to life.”

The Wpay team will also look to trial new ways to help customers pay digitally in-store in the months ahead.