What is EFTPOS?

Running a business means hearing a bunch of terms you might not be familiar with. Business jargon that sounds complicated but is actually pretty straightforward once you break it down. Think CRM (Customer Relationship Management), ROI (Return on Investment), or POS (Point of Sale). 

The term we’ll talk about today is EFTPOS.

So, what is EFTPOS? How does EFTPOS work? And, how can EFTPOS payments benefit your business? Let’s get into it.

What does EFTPOS stand for?

EFTPOS stands for Electronic Funds Transfer at Point of Sale. It’s just a term for those payment methods used at card machines that accept debit and credit card payments. This includes payments made via mobile phones, smartwatches, and other wearable payment methods.

Just so you’re aware, when we’re talking about "eftpos" (lowercase), we’re referring to the Australian payments brand run by EFTPOS Payments Australia Ltd. It lets businesses receive payments directly from an Australian customer’s bank account through their debit card at the point of sale (POS).

How does EFTPOS work?

Businesses that want to accept EFTPOS payments typically need to set up an agreement with one of the seven proprietary networks that work together (think those major banks like National Australian Bank (NAB) and CommBank).

However, with Epos Now, this whole process is streamlined for you. You can start accepting EFTPOS chip-enabled cards just by setting up an Epos Now account and using our card machines, such as the Epos Now Pro + or another one of our mobile portable devices. 

Back in the day, customers in shops or restaurants had to swipe or insert their eftpos card into the terminal (remember that little slot?) These days, it’s all about contactless. Just a quick tap on the EFTPOS terminal, and you’re good to go.

Behind the scenes, the EFTPOS terminal pings the customer’s bank to check that the card is valid and there’s enough money (or credit) available. Once the bank gives the green light, it starts the process of moving the funds from the customer’s account to the seller’s account at settlement.

Benefits of EFTPOS for businesses

If you're in business today and not yet utilizing EFTPOS, it’s probably time to rethink your strategy. The financial benefits are clear. EFTPOS simplifies payments and streamlines your business cash flow. Unlike traditional methods, EFTPOS transactions settle in real-time. That means no waiting for deposits to clear, no more managing piles of cash that need counting, and most importantly, no risk of having cash on hand that can be stolen. 

Now, think about your customers. The more payment options you provide, the more likely they are to make a purchase. By accepting EFTPOS payments, you're opening the door to credit cards, digital wallets like Apple Pay and Google Pay, and more. This is the flexibility that modern customers demand, and failing to offer it is a missed opportunity. 

Finally, efficiency matters and the faster a transaction happens, the quicker you can serve more customers, close more sales, and boost overall satisfaction. By reducing transaction times, you’ll have less time spent at the counter, fewer people waiting in line, and customers out the door faster. This is the sort of efficiency that businesses should be striving for, especially in high-demand industries like retail and hospitality where time truly is money. 

Benefits of EFTPOS for customers

Now onto why offering these electronic payments makes life easier for your customers:

1. Convenience and flexibility: EFTPOS offers customers a seamless way to pay. With options like contactless payments, mobile wallets, and traditional chip and PIN, customers can choose the payment method that suits them best, whether it’s tapping a card or using their smartphone.
2. Faster checkout process: Nobody likes waiting in line. It's boring, and if the line's too big and your customers are in a rush they might even leave your store without buying your brilliant products or services. EFTPOS payments process in seconds, making it easier for customers to get through checkout or pay their bills without delays.
3. Safer payments: Carrying less cash reduces the risk of loss or theft for customers. EFTPOS transactions are also protected by encryption and PIN security, ensuring peace of mind for every purchase.

What is an EFTPOS machine?

An EFTPOS machine is a hardware device that enables businesses to accept electronic payments from customers. It's commonly found in retail stores, restaurants, and other businesses where in-person EFTPOS transactions happen.

What does EFTPOS look like?

You’ve probably seen one before. An EFTPOS machine typically has a sleek, compact design with just a few key features. There’s usually a small screen showing the transaction details, a keypad for PIN entry (for that extra layer of security), and a slot for inserting cards or a tap feature for those easy contactless payments. Some even come with a built-in receipt printer, so customers get proof of purchase on the spot.

Now, while these machines might look different depending on the model, they tend to fall into two main categories: countertop versions (for a stationary setup) and portable, handheld devices (perfect for those who need flexibility and mobility). No matter the form, though, EFTPOS machines are designed with one thing in mind, getting transactions done quickly, securely, and smoothly. 

EFTPOS security and compliance

When we handle payments, security is extremely important. Data breaches have the potential to compromise sensitive customer data and result in significant financial losses. Just look at Cash App, which had to pay 15 million dollars for a data breach that compromised millions of its users. EFTPOS payment systems are built with the very best security features to protect both businesses and customers alike from these kinds of situations. 

Of course, there’s no way to guarantee 100% security, but with EFTPOS, you’re investing in a system that takes compliance and protection seriously, which can reduce the chances of a breach.

EFTPOS machines use encryption technology, which essentially means they scramble your card details so no one can intercept or misuse them during the payment process. These systems are also compliant with strict industry standards, like the Payment Card Industry Data Security Standard (PCI DSS), ensuring that card details are stored and transmitted safely and that businesses follow best practices to prevent any breaches.

Other terms used to describe EFTPOS

So, EFTPOS is the go-to word for payment systems in Australia. But if you're dealing with international businesses, you might hear a few other terms tossed around. It’s like calling a soda "pop" —same thing, just different names.

1. Electronic payment system: This one’s the big umbrella term. It covers any kind of digital payment, including EFTPOS. So when you hear “electronic payment system,” they’re basically talking about EFTPOS, credit cards, online banking, or mobile wallets. It's the catch-all for all those cash-free ways to pay.
2. Card payment system: Straightforward. It’s just EFTPOS but dressed up in a fancier name. It’s used specifically when EFTPOS handles card payments. Debit card transactions, credit cards, you name it. If there’s a card involved, this term gets thrown around.
3. Payment terminal: That thing on the counter that you’re swiping your card through? Yep, that’s the payment terminal (a.k.a. the EFTPOS machine). This one refers to the physical machine.
4. Debit card payment system: Sometimes, EFTPOS is just called a debit card payment system because it’s used mainly with EFTPOS debit cards. These cards link straight to the customer’s bank account, making payments easy and instant.

Can EFTPOS be used online?

Traditionally, EFTPOS is all about those face-to-face, in-person transactions. Like when you’re tapping your card or phone at the counter. But it can also be used online now, too. That’s right, you can accept EFTPOS payments on your website, just like you would in your store.

To make this happen, businesses need an EFTPOS system that connects with online payment gateways. So you'd have to set up a super secure way for customers to pay using their EFTPOS debit cards or mobile wallets without pulling out a credit card. No extra steps, just seamless transactions.

While EFTPOS systems for online payments aren’t everywhere just yet, they're definitely on the rise. Banks and financial institutions are catching up, making it easier for businesses to jump on the digital payments train.