EFTPOS payments

Electronic funds transfer at the point of sale (EFTPOS) is a payment system that lets your customers pay directly into your bank account using an EFTPOS machine using a plastic card, such as a bankcard, credit card or debit card.

Eftpos Payments Australia Limited (ePAL) oversees Australia’s EFTPOS system. Read the Reserve Bank of Australia’s About the payments system page to learn more about ePAL’s role in Australia’s payments system.

Benefits EFTPOS payments

As well as disadvantages, EFTPOS payments have several advantages. Check out these examples:

  • Lower labour costs than cash

    EFTPOS payments go directly into your account, so there are lower labour costs since people don’t have to handle money or record cash receipts.
  • Low risk of theft

    Since EFTPOS payments go directly into your account, they have a lower risk of theft than cash.
  • Fast transaction speed

    EFTPOS payments are fast to process.
  • Proof of payment

    EFTPOS automatically creates a record of payment, which can help avoid disputes.
  • Convenience

    Some customers may find EFTPOS convenient, as they don't need to carry large amount of cash.

Disadvantages EFTPOS payments

EFTPOS payments are not free and have some disadvantages over other payment methods. Consider these examples:

  • Service fees

    Your financial institution often charges service fees if you want to offer EFTPOS payments.
  • Transaction costs

    Your financial institution may charge you a fee per transaction.
  • Lack of privacy

     EFTPOS payments automatically create a record of each transaction. Customers may prefer cash for private goods and service, such as medications.
  • Reliance on electrical and mobile phone infrastructure

    EFTPOS transactions require electricity and sometimes need access to a mobile phone networks. Cash may be more reliable if these services are unreliable or unavailable.
  • Technical problems

    EFTPOS machines can malfunction.

Processing EFTPOS payments

If you want to offer EFTPOS payments, check out these steps:

  1. Shop around for the best EFTPOS provider for your business. It is a good idea to think about what EFTPOS machines cost and how their features may increase your sales volume.
  2. Buy EFTPOS access from the best EFTPOS provider for your business.
  3. Let your customers know that you offer EFTPOS. If they want to use it, they may ask to pay using it when finalising the sale.
  4. After a customer offers to buy your goods or services, let your customer know how much the goods and services cost.
  5. Follow the instructions for your EFTPOS machine from your EFTPOS provider. You usually need to enter the payment amount into the machine, scan a card and get your customer to type in a passcode. Newer machine and cards may let customers without typing in their passcode using technologies like Mastercard’s PayPass and Visa’s PayWave.
  6. Provide your customers with a receipt and/or a GST tax invoice if they request one. If GST applies, you must provide a GST tax invoice within 28 days if your customer requests one.

Payments using mobile phones or watches

EFTPOS machines with a contactless facility may let your customers pay using their phone or watch, using near-field communication. If you have an older EFTPOS, it might not have a contactless payment facility. There might be upgrade costs in upgrading your EFTPOS machine to accept payment by phone and watch technology.

Tips for using EFTPOS payments

  • Shop around

    Look for the best EFTPOS deal for your business. It is good to think about how the deal affects your costs, sales volume and the goals of your business.
  • Offer EFTPOS if your customers want it

    Some customers may prefer pay using EFTPOS.
  • Make sure EFTPOS payments don’t make a loss

    EFTPOS providers often charge transaction fees. Make sure you are not making a loss when you sell items by EFTPOS. For example, you could charge extra for EFTPOS or have a minimum purchase amount to make sure you’re not making a loss.
  • Use EFTPOS for high-value payments

    Having too much cash on premise increases the risk of theft. Use EFTPOS for high-value payments to avoid getting too much cash on premise.

More information

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