Long gone are the days when paying for goods and receiving a receipt was a process done manually. With the rise of technology and computerization of every industry, incredible inventions saw the light of the day. One such invention was the EFTPOS system which facilitated paying for goods and services by enabling an instant money transfer from one bank to another with a set of a terminal (the computer and printer) and the Internet. Here is everything you need to know about it if you are planning to start a new business soon or want to get introduced to the whole concept.
What is EFTPOS?
EFTPOS is an Australian paying system that enables retailers to directly receive money from their customers by an instant money transfer from the customer’s bank to their bank account using a debit, credit or EFTPOS card. The name of the system is an abbreviation that stands for Electronic Funds Transfer at Point of Sale. It is used as the most common payment system in Australia and provides a plethora of benefits for its users. The fact that it handles over 70% of the debit card transactions in the country speaks volumes about its popularity. More precisely, more than 6 million transactions are made daily from more than 760.000 EFTPOS terminals.
How does it work?
The major banks in Australia, including Commonwealth Bank, National Australia Bank, and Westpac operate with the system which is composed of 7 proprietary networks that are all linked among each other. All Australian credit cards are functional as well as Visa and MasterCard.
When it comes to making a transaction, the customer can choose whether to do it with Cheque, Savings or Credit. The first two types will directly process the payment via EFTPOS while the Credit type will do the transaction using the Visa or MasterCard network.
The transaction fees for the retailers who are using the EFTPOS system is a flat rate of about 14 cents per transaction, whereas using Visa or MasterCard will cost 0.86% of the whole transaction.
What do you need to set up the system?
In order for the EFTPOS system to work, there is a need for a POS terminal (Point of Sale) or also known as a credit card terminal or EFTPOS terminal, a computer and the Internet. The POS terminal is the device that scans the credit/debit/ EFTPOS card and makes electronic funds transfers. The customer gives their card to the cashier, and the cashier scans it, asks the customer to enter their PIN code which is a code that only the customer knows and finalizes the transaction using the Internet.
Once the transfer is completed, the terminal prints out a receipt with the help of EFTPOS rolls inside and the cashier gives a copy to the customer while taking another one for record-keeping. The receipt is a valid document about the financial transaction and can serve as proof in case of returning goods or using a guaranty for needed service.
What are the benefits of the EFTPOS system?
As said before, there are a plethora of benefits of using the EFTPOS payment system. For example, a lower risk of theft because there is no handling of cash, all the funds are directly transferred electronically. Then, a fast transaction speed as they process payments very fast. Next, proof of payment – the customer receives a receipt that is a valid piece of document that will help to avoid future disputes. And, finally, greater convenience – because customers don’t carry a huge amount of money with them, instead they carry only a card.