What is an EFTPOS machine?

Ah, the age old question asked by (almost exclusively) the recently arrived to our shores, unfamiliar with the lingo. 

We’ll tell them it’s sadly not an Australian version of the popular theme park ‘EPCOT’ (at least I would), it’s just a ‘card machine’. And we’ll probably follow that with something about not knowing what EFTPOS actually stands for.

But it’s a question that business owners should really be asking for themselves more often than they think. Because if you dig a little bit deeper, you’ll find that an EFTPOS machine can be just about the best thing you can have in your business, and I’ll prove it by answering these simple questions:

• What does EFTPOS stand for?
• What is an EFTPOS machine?
• How does the money move when making an EFTPOS transaction?
• What are the benefits of an EFTPOS machine?
• What are the drawbacks of an EFTPOS machine?
• How much do EFTPOS machines cost?
• Why is EFTPOS important to your business?

What does EFTPOS stand for?

EFTPOS stands for Electronic Funds Transferred at Point Of Sale. Put simply, it’s a funny sounding acronym that has become ubiquitous with transactions around Australia.

Now that’s out of the way, onto the juicer stuff.

What is an EFTPOS machine?

An EFTPOS machine processes digital payments accepting credit cards, debit cards, and most of the things in your digital wallet. It is a payments network which facilitates the electronic transfer of funds at a businesses point of sale from that debit card, credit card, or whatever’s in the customer’s digital wallet (like Apple Pay), to the businesses bank account. There are fees involved for each transaction on the business’s side of things (although sometimes not), and they are now definitively the preferred way to pay in Australia.

How does the money move when making an EFTPOS transaction?

This all depends on which option the consumer chooses on your EFTPOS terminal. There are three choices: cheque, savings (more like spendings, am I right?) or credit.

If the consumer chooses either cheque or savings, then that transaction will be processed through the EFTPOS system, whereas if they choose credit, then that transaction will be processed via the Mastercard or Visa network depending on which card they use.

And depending on which bank you use, the funds should be in your account the next day.

What are the benefits of an EFTPOS machine?

Oh boy, where do I start?

Have you ever handled money? What am I saying, of course you have! So you’ll know the drawbacks of cash handling and the many faces it can take. 

I’m talking not only about how famously unsanitary cash can be, but also some of the more overlooked aspects of physical currency.

This ranges from the excruciatingly slow coin counters at the grocery store checkout, apparently caught off guard by their payment and determined to part with only the correct amount of money, at least to start with. After a full calendar year of examining every 5c coin in their purse like they’ve never seen one before in their life, until they realise that they’re a bit short and pull out the 50 that everyone in line could see poking out this whole time.

They do this every single time.

Then there’s the awkward coins/notes change scenario. If there’s no line, you’re golden. You can give them the coins first, then the notes. But if you’re busy? It’s notes first, and then coins, dumped into the note with complete disregard for convenience.

Such a nightmare.

And cash is so easy to “misplace”, you’ll spend so much time trying to reconcile an end-of-day cash register that your minimum wage bartender’s already driven home in their brand new Porsche before you can ask them about why their till’s so light.

So please, allow me to illustrate some of the benefits of having an EFTPOS machine in your venue.

Firstly, in all but the rarest of rare occasions (I’m looking at you, American tourists), you don’t have to touch anything. It’s a simple tap, and off you go. And the only awkward part is figuring out whether it’s a tap on the side machine, or a tap on the top one.

And as far as money going missing? A relic of the past. 

Your EFTPOS machine can be fully integrated into your POS system meaning faster, accurate transactions, and less time reconciling at the end of the day.

What are the drawbacks of an EFTPOS machine?

None, really.

Sorry if you were expecting this section to be bigger.

How much do EFTPOS machines cost?

I knew we’d end up here (not least because I’m writing this article). The money question.

As important as it is awkward, the cost of your EFTPOS machine is crucial to the successful running of your business. You don’t want all of your hard-earned profits eaten up by expensive EFTPOS fees, do you?

There’s also the cost of the hardware to consider too. Fancy bits of tech don’t grow on trees (yet). Somebody’s got to pay for them, and that somebody is overwhelmingly you.

So here’s the thing, there is no easy, definitive answer to this question. Each EFTPOS machine costs different amounts due to a number of factors. 

More expensive hardware could make your fees higher than usual. On the other hand, payment providers also run deals and special offers, bundling in your hardware and that could lead to you paying less.

And certain banks provide better rates if you bank with them; another way to keep the costs low.

It’s perhaps wise to consider the cost of time when shopping around too. EFTPOS machines that aren’t integrated are usually cheaper, but the time lost trying to rectify keying errors either in the moment or when it comes to reconciling at the end of the shift will cost you money. It’s food for thought.

Why is EFTPOS important to your business?

I think having an EFTPOS machine for your venue would be a sensible idea.

It’s 2022, and consumers are overwhelmingly steering towards digital payments over physical cash. The stalls at my local farmers market have EFTPOS machines. Even the ticket guy on the ferry has one and that’s public transport!

All jokes aside, having an EFTPOS machine in your business is a sure fire way to speed up transactions, cut out accounting mistakes, and speed up your end-of-day reconciliations. There’s less trips to the bank for depositing cash or processing a change order. In fact, there’s less handling of cash altogether, which in a time of heightened cleanliness and desire to not spread any unwanted germs is a plus.

So, to answer the big question of what is an EFTPOS machine? I’d say it’s the most important thing to have in your business.