If you have a small or medium business, you have probably been using EFTPOS from the beginning. However, if you are just starting out on your entrepreneur path, you need to understand the basics of how this system works so that you can make use of all the benefits from it. And not only for your starters but for everyone else you want to get to the bottom of how it works, here is all you need to know about EFTPOS.
What Does EFTPOS mean?
EFTPOS is an acronym that stands for Electronic Funds Transfer at Point of Sale. This is a paying system that is used across all industries for instant payment and giving receipts. The system consists of an electronic device that transfers the money from the customers’ bank account to the bank account of the seller. In order for it to function correctly, there is a need for an EFTPOS Card, Debit Card, or Credit Card.
How Does the System Function?
There are four parties involved in the smooth transfer or money from one bank account to another. The first party is the network of people who process the payments and check whether they are declined or accepted. The second part is the processing bank, which is the bank that processes all daily card transactions. It doesn’t have to be the bank where you have your business account; it can be any bank.
Then, the third party is the finance companies from which you can lease the EFTPOS system for a monthly fee that you will pay by direct debit. This means that you don’t own the EFTPOS terminal, but the finance company. Finally, the fourth party is the EFTPOS dealers who supply the EFTPOS and service them when necessary. You can buy, lease, or rent the terminal from these people along with the needed paper stationary material such as EFTPOS rolls.
EFTPOS Cards Vs. Debit Cards Vs. Credit Cards
Chances are, you have most certainly heard the terms EFTPOS, debit, and credit card before. Here is what they are and how they are similar and different.
First, they are similar because they use funds available in your bank account to pay for goods or services. The EFTPOS card and the debit card do it without drawing on any form of credit, which is not the case with the credit card.
Now, the differences. The EFTPOS is an Australian system, which means that the EFTPOS Card can be used only in few selected places outside Australia. On the other hand, you can use your MasterCard or Visa debit or credit card everywhere in the world.
Secondly, if you are doing online shopping, you can’t use the EFTPOS card, only the debit, and the credit card. Thirdly, with the EFTPOS card, you have to option to pay with savings (SAV) or cheque (CHQ) while with the debit card, you can also pay with credit (CR).
Finally, banks might charge you for making purchases with the EFTPOS card or give you a few free transactions a month, even though this practice is less common today than before. If you use the Visa or the MasterCard, then you won’t be charged.