EFTPOS 101

Understanding EFTPOS

EFTPOS (Electronic Funds Transfer at Point of Sale) is a common way for businesses to accept card payments for goods or services at points of sale. It might be at the counter or mobile depending on the machine selected.

The EFTPOS machine (otherwise known as an EFTPOS terminal) is an electronic device that reads customer cards, and encrypts and sends data to move funds from a customer to the business.

It’s a safe and efficient way to conduct payments and with Tyro we make it simple and effective for all our customers.

Tyro offers both Mobile and CounterTop EFTPOS machines. 

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How can customers pay with EFTPOS?

There have been great advances in EFTPOS. To pay by EFTPOS, customers can pay on the EFTPOS machine with a card, mobile device or wearable (e.g. fitbit, ring, watch, etc.), selecting cheque, savings or credit by tapping (referred to as contactless payments or ‘Tap & Go’), inserting or swiping.

When customers make a payment from their Cheque or Savings accounts, this goes through Australia’s debit card payment system, the eftpos network, not to be confused with EFTPOS. When Credit is selected, this payment could go through a variety of payment networks – Visa, Mastercard, American Express, JCB, Diners Club, or UnionPay. All of these payment types are referred to as ‘Schemes’.

Other payment types include: Apple Pay, Google Pay and Samsung Pay, used for mobile devices or wearables, though these are all routed via one of the schemes, depending on the cards that are loaded in the digital wallets.  Customers are also now able to pay with Alipay^*, a popular Chinese payment app, on Tyro’s EFTPOS machines. 

How does EFTPOS work? 

When a customer taps, inserts or swipes a card, phone or wearable, their payment request is sent to the business’ acquiring bank, in our case, Tyro. Almost instantly, we send a request to the bank that issued the customer’s card. That tells us if the customer has the funds for the transaction and checks to see if the transaction looks legitimate. If everything’s in order, the transaction’s approved. A hold is placed on the funds and the funds are moved from the issuing bank to the acquiring bank. The acquiring bank then settles the total funds into the business’ bank account.

How popular is EFTPOS? 

EFTPOS is incredibly popular in Australia. Australians enjoy the convenience and security EFTPOS offers and that’s why there are 975,622 EFTPOS terminals in Australia as of December 2018^{^} compared with 29,510 ATMs, which are on the decline.

Is EFTPOS more popular than cash?

More and more customers choose to pay with card over cash. In 2018, Australians made 2.88 billion credit and debit card transactions worth $335.28 billion, up from 1.45 billion transactions, worth $219.32 billion a decade prior in 2008.^§ 

It’s a growing shift and businesses with fast payment solutions like Tyro EFTPOS are set to take advantage of the thousands of customers who prefer the convenience of card payments. The introduction of contactless payments has seen tremendous growth for all kinds of purchases, in particular payments of $20 or less^¤. It’s clear Australians enjoy the convenience and security EFTPOS offers and as Australia moves closer to becoming cashless, the opportunities for businesses who embrace fast efficient payments like Tyro EFTPOS is endless.