herBusiness - The Australian Businesswomen's Network Blog
herBusiness - The Australian Businesswomen's Network Blog

Goodbye “Cash Only”: The Low-Down on Eftpos and Accepting Credit Card Payments on Your Mobile Phone

By Nerida Gill

2 October 2013 | 3 Comments

Using EFTPOS for your businessBack in 1981, while I was playing with my Rubik’s Cube and watching Tony Barber on Sale of the Century, some clever techies in the US developed eftpos. It’s amazing to think this revolutionary cashless payment system came into being the same year as Culture Club — yes, it really is 32 years old!

In all that time, however, eftpos hasn’t been all that user-friendly for smaller businesses or those often on the road.

Thanks to new smartphone and Internet technology, though, this is rapidly changing — payment by credit card, debit card and even PayPal is now a very real option for home-based and part-time businesses, or even people who only occasionally sell at markets and trade fairs ... and the fees are enticingly low.


I’m afraid it’s terminal

You’ve probably noticed the three main types of eftpos terminals from the buyer’s side of the cash register.

A fixed terminal is like dial-up Internet —it’s the “old-fashioned” type of eftpos machine that’s linked to its own phone line and power outlet by cables. You usually see these in bricks ‘n’ mortar retail stores, where they never move from the counter, thanks to those cables.

A wireless terminal is like a cross between a wireless modem and mobile phone. The machine is still connected by cable to a power outlet, but uses broadband instead of a dedicated phone line, which means you need access to a digital signal.

A mobile terminal is where eftpos starts to get really interesting. Again, as long as you have access to a digital signal, you can traipse across the countryside, from customer to customer, with these lightweight, handheld devices. Woohoo ... not a cable in sight!


More choices than ever

The traditional eftpos facility is now incredibly flexible. Depending on the terminal and package, you can now:

  • Scan loyalty cards
  • Convert currencies
  • Process Medicare and private health fund cards
  • Automatically add surcharges
  • Accept virtual payments
  • Share one machine with multiple businesses
  • Hire a machine for a short time period.

However, it’s not all peaches and cream. While there are enough eftpos machines in Australia for every person in Canberra, where I live, to own two, the system has one big drawback, which is....


The fee monster

Eftpos comes with four types of merchant fees:

  1. Monthly terminal hire and service provision fees, which are akin to line and handset rental for a landline telephone.
  2. A fixed fee for every transaction, sometimes with extra fees for debit cards and cash out.
  3. A percentage charge for every credit card processed, which can vary depending on the card brand or country of issue.
  4. Various fees for joining and installation, cancellation, general admin, paper rolls or if a customer disputes a transaction with their bank.

As you can imagine, all these fees add up to make eftpos rather expensive. This may be fine for businesses that process huge numbers of transactions or have high enough margins to swallow the extras, but it leaves other businesses between a rock and a hard place.

What if you’re a start-up, home-based or part-time? What if you have small margins or low transaction volumes? Or what if you only need eftpos for the occasional trade stand or market?

You could choose customer convenience over profits or pass fees on through an eftpos surcharge ... or you can use the latest “smart” technology to....


Turn your mobile into a money-making machine!

Yes, the technology is here to use your smartphone to process credit and debit card payments. It’s not technically eftpos, but does the exact same trick.

At first, financial institutions and merchant service companies went for “smart” cases that essentially clipped a credit card reader to your smartphone. The Commonwealth Bank and Paymate still have these, but other providers, such a NAB, ANZ, Westpac and PayPal, have changed in the last few months to online payment gateways, which allow you to process credit card payments on your smartphone or tablet via an app.

Most providers cater solely for android or Apple, so your brand preference will dictate your choice. This, of course, is a very small price to pay services that usually come free of monthly charges, set-up fees and contracts. All you pay for each transaction is a fee of up to 3% plus a charge of about 30 cents when you enter a credit or debit card number. Now that’s a smart way to do business!

Nerida Gill, Admin Bandit


Nerida Gill, Admin Bandit

Nerida Gill

Nerida Gill is the creator of Admin Bandit, a web-based accounting package designed specifically to make keeping the books easy for volunteer treasurers in community groups. Admin Bandit is an IT company specialising in design and development of websites for micros and small business. We also have ...

Read more about Nerida Gill


Great article! Up until now I buried my head in the sand when it came to investigating the best payment methods for customers. Its good to know there are customer friendly methods that don't come with loads of fees. Thanks Nerida!

Comment by Michelle 'The Career Whisperer' Furtado — October 2, 2013 @ 1:45 pm

I've just signed up for Paymate - for $20 you get a credit card swipe attachment for your phone and then it take a certain percent for transaction fees.
I am using it for my first craft market this Sunday so it will be interesting to see how many people use it and if it will help my sales !

Comment by Victoria — October 9, 2013 @ 7:45 am

Hi Nerida... thanks for this great article, very informative. You pointed out that EFTPOS facilities can process medicare and private health care funds. Do you know of any cost effective mobile payment methods (other than mobile eftpos) that can process these? Thanks in advance, Lauren :)

Comment by Lauren — January 17, 2014 @ 4:24 pm

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