People often confuse EFTPOS and POS systems. This is mainly because salespeople try to confuse the issue by claiming that EFTPOS is POS. It is not.

What is EFTPOS

The bank system links the proposed transaction from your shop to the banking system. It usually operates through a terminal that allows customers to use their cards to complete an electronic payment using debit or credit cards.

The main features of EFTPOS terminals are:

• Secure payment processing
• Support for multiple payment methods (debit, credit, contactless)
• Encryption of payment data

What is a POS System?

It is the hardware and software used to run a shop.

Key features of POS systems include:

• Sales management and transaction processing
• Inventory tracking and management
• Customer relationship management (CRM)
• Reporting and analytics

How EFTPOS and POS Work Together

In modern retail POS Systems like ours, the EFTPOS terminals are often integrated into the Point of Sale Software. Here's how they typically work together:

1. The POS system calculates the total sale amount.
2. This amount is automatically sent to the EFTPOS terminal if integrated.
3. The customer completes the payment on the EFTPOS terminal.
4. The POS system gets a response from the EFTPOS terminal that the transaction has gone through.
5. The POS System records the completed transaction.

This integration offers several benefits:

• Reduced manual data entry, minimising errors
• Faster checkout times, improving customer experience
• Simplified end-of-day reconciliation
• Real-time sales data for better business insights

Security Considerations

Both EFTPOS and POS systems must prioritise security to protect sensitive customer data. Integrating them makes them more secure.

Choosing the Right Solution for Your Business

A standalone EFTPOS terminal vs an integrated POS system

Faster

It's much faster, as the information exchange between the EFTPOS unit and the POS System is automatic.

Secure

Integrated systems mean that the merchant has an extra layer of security, as the POS Software and the EFTPOS are linked. The controls that enter the EFTPOS pass through the POS software checks first.

Fewer mistakes

People are in a hurry, and let's face it: almost everyone in retail is busy, so they make mistakes. POS Software makes fewer mistakes. For example, a person often misreads a one and a 7. Instead of $70 into the EFTPOS unit, they punch in $10. The retailer loses $60. Sometimes, this behaviour is not accidental; store attendants give discounts to relatives and friends.

Popular EFTPOS and POS Solutions in Australia

Our users can have various EFTPOS leading providers in the Australian market.

Conclusion

While EFTPOS terminals are for the payment processing only, an integrated POS system offers a comprehensive solution for managing your entire retail operation.

FAQs

Q: Can I use an EFTPOS terminal without a POS system?

A: Standalone EFTPOS terminals can process payments independently but won't offer inventory tracking or sales reporting features.

Q: How much does an integrated EFTPOS extra cost?

A: Costs vary depending on the EFTPOS providers. We do not charge for the integration.

Q: What's the difference between contactless payments via EFTPOS vs credit cards?

A: EFTPOS transactions through savings/cheque accounts usually have lower fees than credit card transactions processed via Visa or Mastercard networks.

Q: Are there any security risks in integrating EFTPOS with POS systems?

A: Overall integration will enhance security by reducing manual data entry; however, some intelligence is still needed to reduce the risks.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

If you want to compare your current EFTPOS/Credit Card providers with others, there are a few simple steps to do:

Before you begin

I suggest you ask the following:

Speed of Fund Transfers

How quickly does the provider transfer funds to your bank account? This is very important if your main account isn't with one of the big banks. Delays can disrupt cash flow, especially during busy periods. It's aggravating to collect out-of-fund messages from the bank if you have the funds in another bank and are getting them into the required bank.

Service Quality

Poor service from a payment provider can cause unnecessary stress. You can always do an online search on customer reviews for the provider you are looking at. How many stars do they have? I have seen people pull out EFTPOS systems because of bad quality.

Contact terms

You can get better rates if you are willing to commit for a decent period.

Also, as you know, a contract does not lock the provider into terms. I have often seen my clients get a letter from the providers using the rate after a year in a three-year contract, and they are switching my customers to a different rate.

Transparency in Quotes

Please always ask for the total cost in writing for provider quotes. Some providers present attractive rates but do not or underestimate items that add up over time. Could you make sure this is in writing? If you get into a dispute, arguing over one figure in a total cost is much easier than a rate sheet.

Once you get this total cost, you still need to check. It's easy after you have done a few, like me.

Key Information You'll Need to Calculate EFTPOS Costs

To calculate your EFTPOS costs accurately, gather the following details:

Card Mix

You should get this from your existing EFTPOS statements or your total reports. You need a breakdown of transactions by card type: debit, credit (generally VISA and MasterCard), and international cards, e.g. AMEX.

• Monthly transaction volume (number of sales)
• Average transaction value

What the EFTPOS/Credit provider wants is

• Monthly transaction total by type
• Average transaction value

If this data isn't readily available, estimate based on past sales and your experience.

Fee Structure

• Transaction fees: Fixed (e.g., 25¢ per transaction) or percentage-based (e.g., 1% of the transaction value)
• Terminal rental fees: Monthly charges (e.g., $30/month) or upfront purchase cost
• Other fixed fees, account fees, gateway fees, etc.

Additional Costs

• Setup fees for new EFTPOS machines
• Chargeback fees (typically $15–$35 per dispute)
• Stationery costs (e.g., receipt rolls)
• Equipment replacement or repair fees. Stolen EFTPOS units were a problem for our clients a short time ago.

Step-by-Step Calculation

Once you've gathered the necessary information, follow these steps:

Calculate Debit Card Fees

Debit card fees are often lower than credit card fees. Use one of these formulas:

• Fixed fee: {Monthly Transactions} x {Debit Rate}
• Percentage fee: Monthly Transactions} x {Average Transaction Value} x {Debit Rate}

Example:

• 1,000 debit transactions/month
• Average transaction value = $50
• Debit rate = .8%

Calculation: 1,000 x $50 x .8%

Calculate Credit Card Fees

Use the same formula as above but with the credit card rate, which is usually more.

Example:

• 300 credit transactions/month
• Average transaction value = $50
• Credit rate = 1.2%

Calculation: 300 x $50 x 1.2%

Calculate International Card Fees

International cards incur higher rates due to additional interchange and scheme fees, but the above formula is the same.

Add Fixed Costs

Include monthly terminal rentals and other fixed expenses like stationery or compliance fees.

Example:

• Terminal rental = $27.50/month
• Receipt rolls = $26/month

Total fixed costs: 27.50 + 26

Factor in Variable Costs

Some costs, like chargebacks, are unpredictable; I use a yearly estimate and calculate a monthly average. One point that helps here is having a camera recording the EFTPOS unit.

Example:
If I go about one chargeback a month on average, it might be
Chargeback fee estimate = $30/month

Here is a sample EFTPOS sheet, I made up.

It adds up.

Tips for Managing EFTPOS Costs

Negotiate Rates

Many providers will offer better rates if you commit to a longer-term contract or demonstrate high transaction volumes.

Check Rates

For some reason, and I do not know why, different suppliers quoting the same rate somehow get different figures. When I was analysing some figures for a customer, I found that 1% from CBA and 1% from TYRO gave different results. If this happens to you, I suggest you make some enquiries. 

Push the payment methods with cheaper fees.

Do not forget that Cash has many advantages here.

Integration is great

But it does often cost extra

Use Least-Cost Routing

If it's not in effect, please put it on immediately. Check here for details.

Review Statements Regularly

Check for hidden charges or errors in billing.

Final Thoughts

Understanding your EFTPOS/Credit costs is needed to run an efficient business.

We're pleased to announce a significant upgrade to our Commonwealth Bank of Australia (CBA) integration, which offers faster processing and more payment options. If you use CBA-integrated EFTpos now, this enhanced system will revolutionise how you handle transactions and manage your business finances. I suggest you upgrade now if you use or want to have CBA.

Key Features at a Glance

• Much faster EFTPOS and credit card processing
• No premium card surcharges, e.g. American Express acceptance
• Digital wallet compatibility
• Real-time financial insights
• Enhanced security features

Faster, More Stable Processing

The enhanced CBA Smart Business system delivers significantly faster and more stable processing. Tests show up to 30% quicker processing times. This means shorter queues, happier customers, and more efficient operations for your business.

Multiple Payment Options

Beyond basic payment processing, this enhanced integration delivers several key benefits for your business:

Diverse Payment Landscape

The new system provides a comprehensive range of payment options to cater to all your customers' preferences:

• EFTPOS payments
• Credit cards (Visa, Mastercard, and American Express)
• Digital wallets (Apple Pay, Google Pay, and Samsung Pay)

No premium card surcharges

A standout feature is that you can confidently accept cards without concerns about premium card fees.

It opens up a new customer base, as 22% of Australians now carry an AMEX card and prefer to use it. I know a lot of corporations that issue expense accounts; people can only use them if the retailer accepts AMEX.

Digital Wallet Compatibility

This enhanced system fully supports digital wallets with the rise of contactless payments. In Australia, 40% of consumers now use digital wallets for in-store purchases, making this feature crucial for modern retailers.

Real-Time Financial Insights

The CBA Smart Business integration provides real-time insights into your cash flow, allowing you to:

• Monitor transactions as they occur
• Generate detailed reports
• Make better business decisions as you have up-to-date financial data

This level of visibility can be a game-changer as it makes reconciling much easier.

Enhanced Security and Backup Features

Security is paramount in today's digital landscape. I doubt you will have a problem with CBA, and if something goes wrong, you have local support, which many smaller providers cannot provide.

Operational Efficiency

Streamlining your payment processes can significantly improve your day-to-day operations:

• Faster transaction processing reduces queue times
• Simplified accounting and reconciliation saves you hours each week
• Automated reporting frees up time for other essential tasks

Improved Customer Experience

By offering a more comprehensive range of payment options and faster processing, you're enhancing the customer experience. It can lead to:

• Increased customer satisfaction
• Higher likelihood of completed sales
• Potential for repeat business and positive word-of-mouth

Implementation and Support

Upgrading to the new system is a straightforward process:

1. Contact our integration team
2. Schedule an installation date
3. Receive on-site training for you and your staff
4. 24/7 technical support

Conclusion

It offers a comprehensive solution to improve efficiency.

Ready to upgrade your payment processing? Contact us to start moving.

Here's the complete FAQ list in markdown format:

[FAQ] Frequently Asked Questions

Q: What are the main benefits of upgrading to the enhanced CBA Smart Business integration?

A: Faster transaction processing, no premium card surcharges, digital wallet compatibility, real-time financial insights, and enhanced security features.

Q: How much faster is the new system?

A: Tests have shown that the new system processes up to 30% quicker transactions.

Q: Does this system accept American Express cards without additional fees?

A: The enhanced CBA Smart Business integration allows you to accept American Express cards without premium card surcharges.

Q: What digital wallets are supported by this system?

A: The system supports major digital wallets, including Apple Pay, Google Pay, and Samsung Pay.

Q: How can real-time financial insights benefit my business?

A: Real-time insights allow you to monitor transactions as they occur, generate detailed reports, and make informed business decisions based on up-to-date financial data.

Q: Is the upgrade process complicated?

A: No, the upgrade process is straightforward.

Q: What kind of support is available after the upgrade?

A: You'll have access to 24/7 technical support following the upgrade and local support.

Q: How does this system improve customer experience?

A: By offering faster processing and a more comprehensive range of payment options, the system can reduce queue times, increase customer satisfaction, and potentially lead to more completed sales and repeat business.

Q: Is this system secure?

A: Yes, the CBA Smart Business integration comes with enhanced security features, and you have the backing of CBA for support if any issues arise.

Q: How much does CommBank EFTPOS charge?

A: This is the big question I cannot answer as it depends.