How do EFTPOS machines & transactions work in Australia?

When considering how EFTPOS works, think of it as a conduit between your customer’s bank account and your own. In a nutshell, EFTPOS transfers funds from the card holder account (debit or credit) and deposits those funds into your merchant account.

EFTPOS machines can come in different form factors depending on usage, such as mobile EFTPOS machines which are designed to be carried by staff within hospitality venues to take payments on the go. There are also countertop EFTPOS machines, which are ideal for retail counters or the patient counter at a medical clinic for example.

How money is moved

During the EFTPOS transaction, the acquirer – the EFTPOS provider (for example: Tyro) sends a request to the card holders bank to make sure funds are available and there are no fraud issues to consider. Once approved, the funds are moved later in the day over to the acquiring bank, and then moved over to the merchant bank account.

It’s all done securely, using encrypted data.

How EFTPOS payments work

The way the funds are processed depends on the type of account a customer uses:

  • If using a debit, cheque or savings account, the transaction may travel through Australia’s debit card payment system, the eftpos network (not to be confused with EFTPOS)
  • Credit payments can go through networks like Visa, Mastercard®, American Express, JCB, Diners Club, or UnionPay (these are all called ‘schemes’)
  • Other payments like Apple Pay, Google Pay™ and Samsung Pay operate differently. The way these payments are processed depends on the cards loaded in the digital wallet on mobile, tablet, or desktop.

Keen to know more on how EFTPOS works?

Check out some of our other questions about EFTPOS or ask your own.

Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
Apple Pay is a trademark of Apple Inc., registered in the U.S. and other countries.
Google Pay is a trademark of Google LLC.

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