Coles business up for grabs
Retail businesses within Wesfarmers' Coles division may soon be searching for new suppliers of payments processing and switching services, with management forced to face up to the effective end of life of the proprietary switch installed 15 years ago.As recently as a few months ago there was talk of Wesfarmers looking into the merit of shifting payments' processing from the Bunnings hardware chain over to the Coles switch, but that is now not an option.Rather, Coles, Kmart, Target, Officeworks and related retail businesses look likely to request tenders for new suppliers.Less than three years ago the payment switch owned and managed by Coles for the benefit of its own suite of retail businesses seemed a saleable asset. Reasonably serious efforts were made to scout out a buyer, with both local banks and private equity taking a look over the merit of the asset.Established in the mid 1990s, the foray by Coles into switching was a rare effort by any volume originator of payments instructions to seek greater control of a vital business input.The vendor no longer supports the technology selected by Coles in the early 1990s, ON2 software running on Stratus hardware, forcing Coles to confront a complete system replacement, whether in-house or sourced through a conventional merchant relationship.