EFTPS payment processing for small businesses
When looking for an EFTPOS payment solution you need to weigh up the monthly fixed fees and transaction fees, and find a method that works for you and your customers.
Key takeaways
- There are plenty of ways for small businesses to accept credit card payments, including EFTPOS terminals, portable EFTPOS machines and mobile payment apps.
- Make sure you choose an EFTPOS solution that is convenient for you, your staff and your customers.
- Banks offer EFTPOS payment technology, but many specialist companies like Zeller, Tyro and Square have competitive options too.
1. EFTPOS machines
When considering an EFTPOS machine for your business you have a few options:
- Countertop terminals. These are attached to your point-of-sale (POS) computer system via a cable. You can use them to process card payments from a fixed location in your store. Countertop machines are suitable if you process your payments from one location (such as a cafe or retail store, where payments are accepted at the counter). An EFTPOS terminal should connect to your point-of-sale system so you don't need to manually enter prices into the terminal.
- Portable EFTPOS machines. These work in a similar way to countertop EFTPOS machines except they're portable. This type of EFTPOS machine could be beneficial for small businesses like delivery services, outdoor market stalls, cafes and restaurants where you can process payments at the customer's table.
- Smartphone apps. There are apps that allow you to accept EFTPOS payments via smartphones. This is useful if you or your staff have to travel and accept payments on the go.
Where do you get an EFTPOS machine?
You have to choose a payment services provider when setting up your EFTPOS machine. Depending on the option you can pay a fee to use the machine or purchase it outright.
Some of your options include:
What are the costs of using an EFTPOS machine?
Depending on the vendor, you could be charged a combination of the following fees:
- Establishment fee. Some EFTPOS providers charge a one-off account establishment fee when you first sign up. This may be waived if you sign up for a set period, such as 2 years.
- Monthly plan. Many EFTPOS providers charge a monthly fee, typically $29 to $150 per month.
- Card transaction fees. Many EFTPOS vendors include a set volume of card transactions as part of their monthly plan costs. Others apply a separate percentage cost per transaction, equal to 1.4-1.8% of each card payment processed.
- Additional payment fees. Extra costs may apply if you want to accept payments through services such as UnionPay or over the phone. Some providers also apply a higher card transaction fee for American Express cards.
- Additional EFTPOS machines. EFTPOS plans typically include a single EFTPOS machine or a set number of machines before extra fees apply.
- Printer costs. For EFTPOS machines that have internal receipt printers, you'll need to pay for additional printer rolls and ink. Some banks may provide printer rolls as part of the contract.
Make sure you consider the relevant charges and your average number of monthly credit card transactions before deciding which EFTPOS plan is right for you.
Finder survey: How often are people charged extra for paying by card?
| Response | Female | Male |
|---|---|---|
| Less often | 27.58% | 26.91% |
| Not sure | 24.8% | 23.9% |
| At least once a week | 19.64% | 19.68% |
| 2-3 times a month | 15.67% | 15.26% |
| Once a month | 8.73% | 8.03% |
| Daily | 3.57% | 6.22% |
Source: Finder survey by Pure Profile of 1004 Australians, December 2023
How to choose the cheapest EFTPOS option for a small business
In this scenario, let's say your business processes an average of $20,000 worth of card transactions each month. We compare the costs of 2 different EFTPOS plans based on their monthly fees and transaction fees.
| Fee type | Plan 1 | Plan 2 |
|---|---|---|
| Monthly fee | $180 | $50 |
| Transaction fee | 0% for the first $15,000 a month, then 2% per card transaction for the rest of the month | 1% per card transaction |
| Cost for first $15,000 transactions | $0 | $150 |
| Cost for next $5,000 transactions | $100 | $50 |
| Total cost/m based on $20,000 transactions | $280 | $200 |
Based on this scenario, Plan 2 is the cheapest option, with a saving of $50 per month compared to Plan 1. This is despite the fact that Plan 1 includes $15,000 of card transactions for free per month. For businesses with higher or lower monthly card transaction values, the results could be very different. It is important to consider your own business details when you are trying to find the most affordable EFTPOS option.
Our expert says: Price and convenience matter most
"It really pays to compare EFTPOS payment options closely. Flat fee options give you more certainty about your costs. Lower percentage fees will save you money, especially if your business does large transaction volumes. But the other side to consider is integration and convenience. A payment method that integrates seamlessly with your POS and makes life easy for your customers can be worth paying more."
What are the costs of using mobile credit card readers?
You can use a mobile credit card reader to process payments through your smartphone or tablet or to integrate into your POS system.
You'll pay a fee for the mobile card reader or app. Most mobile credit card processing services charge a flat fee. The following are the two most common methods of charging fees:
- A percentage of the sale.
- A percentage of the sale plus an additional fee per transaction.
How to choose the cheapest mobile card reader for a small business
You can usually choose between a higher percentage of the sale or a lower percentage of the same plus a fixed fee.
| Fee type | Plan 1: Higher percentage of the sale | Plan 2: Lower percentage of the sale + fixed 30c fee |
|---|---|---|
| Transaction fee | 1.5% per card transaction | 1% per card transaction, plus 30c |
| Cost for a $20 transaction | $0.30c | $0.32 |
| Cost for a $50 transaction | $0.75c | $0.80c |
| Cost for a $100 transaction | $1.50 | $1.30 |
| Cost for a $250 transaction | $3.75 | $2.80 |
The right choice for you will depend on the average dollar amount your customers spend per transaction on their card.
How to find the right EFTPOS solution for your business
- Business type. The right type of credit card payment option for you will depend on your business. For example, a countertop or mobile EFTPOS machine may work for you if you're running a cafe, restaurant or clothing boutique. If you own a small business that often sets up shop at different markets, a mobile credit card reader might make more sense.
- Software integration. If you have existing POS software, you will need to find out whether the processing service will integrate with your current software. On the other hand, it may be time to migrate to a newer system. When doing your research, look out for EFTPOS, smartphone or tablet processing devices that offer the most comprehensive solutions, such as accounting or sales reporting features. This can help streamline your other business costs.
- Card acceptance. Most options accept all major cards, but it's important to check before you decide. You should also consider if the service will charge different fees depending on the type of card being processed (for example Visa, Mastercard or American Express).
- Revenue. The value of the machine should offset the cost of setting up a card payment service and any ongoing processing fees.
- Surcharges. It is common for businesses to pass on the cost of processing to the customer by applying a surcharge if they pay with a card. If you choose to do this, make sure you have clear signage to inform customers.
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