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Most Aussies use EFTPOS every week without giving it much thought. Customers tap their card at the counter, the payment goes through, and they’re on their way. But in Australia, there’s also something called ‘eftpos’, which, although it sounds the same, is different to ‘EFTPOS’. This probably has you wondering: What is eftpos? How does eftpos work? And how does it differ from EFTPOS?
Understanding this helps you know what’s really happening when customers pay you and how to set up your business to accept eftpos cards – and every other card that comes your way.
What is EFTPOS?
EFTPOS stands for ‘electronic funds transfer at point of sale’. It’s the system that lets money move electronically during an in-person purchase. When a customer pays with a debit card, credit card or mobile wallet at a register, the EFTPOS system connects your payment terminal to their bank, checks that funds are available, verifies their card and then transfers the money from their account into yours.
The term ‘EFTPOS’ is used worldwide to describe any system that lets customers pay electronically in stores. It covers different payment networks and card schemes that work together to make each transaction happen:
- Payment networks are the infrastructure and systems that transfer money between banks, businesses and customers during a transaction. You might think of it as the ‘plumbing’ that moves the funds.
- Card schemes are the organisations – like Visa, Mastercard and eftpos – that manage how their branded cards are used across those networks, including transaction procedures, security and fees.
What is eftpos?
While EFTPOS describes the payment process in general, eftpos (written in lowercase) is a brand name of Australia’s debit card scheme and network. This system moves money directly from a customer’s debit bank account to a business bank account when the customer pays using an eftpos debit card. eftpos is similar to Visa and Mastercard in that it’s a card scheme, but unlike those global schemes, eftpos operates only in Australia.
Most debit cards in Australia are dual-network (where they display both the eftpos logo and an international brand such as Visa or Mastercard). This means a single card can use eftpos for domestic transactions, and switch to Visa or Mastercard for credit transactions or payments overseas.
Traditionally, customers would choose the eftpos network by selecting ‘Savings’ or ‘Cheque’ on the EFTPOS machine. Today, with contactless tap or mobile wallet payments, the network is often automatically selected, usually determined by the merchant’s preferred debit network. However, customers can still make an explicit choice by selecting ‘Savings’ before paying – often to avoid higher credit card surcharges.
In 2025, Aussies reached for their debit cards more than any other payment method, the Square Future of Commerce report revealed. Over 4 in 5 consumers found them the most convenient for paying at businesses, more so than credit cards and mobile wallets.
To summarise: all eftpos cards are debit cards that work through the EFTPOS system, but not all debit cards on the EFTPOS system are eftpos cards.
How does eftpos work in Australia?
Every eftpos transaction involves a few key steps. To pay by eftpos, the customer either:
- Inserts or swipes their debit card and selects the ‘Savings’ option on the EFTPOS machine
- Taps their smartphone or other device using a mobile wallet, with ‘eftpos’ or ‘Savings’ pre-selected in their mobile wallet as their default network
From there, the transaction flows like this:
- The eftpos network routes the payment request from your EFTPOS machine through the customer’s bank.
- The customer’s bank checks that funds are available in the customer’s debit account and authorises the transaction.
- The money is debited from the customer’s account.
- Settlement follows soon after, with funds deposited into your business account – either instantly, on the same day or the next day, depending on your payment provider.
Because eftpos only operates within Australia, these transfers are made through domestic banking channels. This typically keeps processing times faster and costs lower for local payments, compared with international networks.
How do EFTPOS machines work?
Two common questions new owners ask are: what is an EFTPOS machine, and how do EFTPOS machines work at a business?
An EFTPOS machine is a device that connects your customer’s card to your bank account, securely transferring money during a sale. Also called a card reader or payment terminal, it’s what allows you to take debit and credit card payments in person.
When a customer pays, the machine communicates with three key parties:
- The acquirer (e.g. your bank or payment provider), which processes the transaction on behalf of your business
- The card scheme (e.g. eftpos, Visa or Mastercard), which checks the customer’s card is valid and routes the transaction
- The issuer (the customer’s bank), which confirms the customer has sufficient funds and authorises the payments
Once approved, the transaction amount is transferred from the customer’s account to yours, usually within 1–2 business days.
Modern EFTPOS devices can accept chip + PIN card payments, and contactless payments via cards, phones or smartwatches. Both methods securely move money directly from the customer’s account to your business, reducing the risk of fraud compared with handling cash.
Mobile and portable terminals also allow businesses to accept payments anywhere, making the payment process more flexible and efficient.
How can I start accepting eftpos cards for my business?
For most businesses, setting up eftpos payments means dealing with a bank or payment provider. You usually need to fill out applications, pass credit checks, sign agreements and arrange for compatible hardware. All these steps can take time and require multiple points of contact before you can start taking payments.
Signing up for a free Square account automatically includes eftpos acceptance. There are no complex arrangements or paperwork needed, and you can begin taking eftpos payments right away using any Square hardware. For example, you can pick up the tap-and-go Square Reader for $65 to take on the road, or choose Square Terminal, an all-in-one device with a built-in screen and receipt printer
After struggling with different EFTPOS systems and bank terminals in the past, owners Mike Ico and Dan Harrison were ready for something simpler when they opened Superfreak cafe in Marrickville.
“We had a lot of issues with all of them, in terms of them dropping out or being hard to navigate as an operator, or they wouldn’t have their own terminals and whatnot,” said Ico of previous EFTPOS systems. “We eventually came across Square… We just found it incredibly easy to use.”
For security, Square only accepts cards with a chip. Older swipe-only cards aren’t supported, but fortunately, these are now very rare. Chip cards create a unique code for each payment, making it much harder to steal or reuse card details – it’s why most cards issued today are chip-enabled.
How much does it cost to start accepting eftpos payments?
In the traditional setup, businesses often face a mix of initial and ongoing fees to get started with eftpos. These can include terminal rentals, monthly service charges, installation, software subscriptions or account setup. On top of these costs, transaction fees are often variable. Businesses could be charged different rates depending on whether a customer used a debit or credit card. All of this makes budgeting more difficult and monthly costs harder to predict.
With Square, pricing is transparent and easy to understand. The Square hardware has a one-off purchase price. For any card payment in person – whether eftpos, Visa, Mastercard or other card brands – a flat 1.6% transaction fee is applied. There are no hidden costs; you only pay when you make a sale. You’ll always know exactly what your processing costs will be, no matter which card your customer uses.
What hardware should I use to accept eftpos?
Choosing the right EFTPOS hardware to accept eftpos payments depends on your budget, priorities and how your business operates. A beauty salon, a tradie and a market vendor each have different needs when it comes to taking payments. Consider the following:
- Cost: Buying hardware outright is a one-off expense with no ongoing hardware payments and full ownership. Renting or leasing may end up costing more in the long run. Check whether the device comes with everything you need or if you’ll need to pay for add-ons.
- Processing fees: Check how much the payment provider charges per eftpos transaction. Are their rates easy to understand, or are some costs ‘hidden’ in the fine print? Simple, flat fees make it easier to forecast your ongoing expenses.
- Portability: If your business moves around – such as market stalls, pop-ups, delivery services or house calls – a lightweight, mobile EFTPOS reader with a long battery life is ideal. If your business is more stationary, like a retail shop or salon, a portable EFTPOS terminal or countertop EFTPOS register offers additional features, such as a touchscreen, a customer-facing display or a receipt printer.
- POS integration: Consider whether the hardware links to point-of-sale (POS) software. This integration can save time by helping reconcile sales, sync with accounting software, track and manage inventory, generate detailed sales and performance reports, and manage employees or multiple locations.
eftpos FAQs
What’s the difference between eftpos and Visa?
eftpos is Australia’s domestic debit card scheme and network that processes payments made from a customer’s debit account. Visa is an international card scheme that processes both debit and credit payments and can be used overseas. While eftpos is limited to use within Australia, Visa is widely accepted globally.
Many Australian debit cards are co-branded with both eftpos and Visa. This means that when a customer chooses ‘Savings’ at the checkout, the payment is processed via eftpos. When they select ‘Credit’ or use the card overseas, the transaction routes through Visa. If a customer doesn’t make a choice, the payment usually defaults to the network selected by the merchant or the card itself.
What to consider when choosing an EFTPOS machine
To choose an EFTPOS machine, consider what matters most to your business. Take into account rental or lease fees, setup charges, software subscriptions and ongoing service costs to understand the total expense. If you need to accept payments in different locations, portability is important – a compact EFTPOS device with reliable battery life lets you serve customers from anywhere.
In addition, a machine that connects with your POS system helps streamline operations by automatically updating sales records, syncing with inventory and generating detailed reports, saving time and reducing manual work. Finally, ensure the device accepts eftpos and major cards so all customers can pay easily.
What is the difference between a debit card and eftpos?
A debit card is a physical or digital card that’s usually linked to an international network like Visa or Mastercard, so it can be used to make payments both in Australia and overseas. eftpos is Australia’s domestic debit card network, which only moves money between Australian banks. Many Australian debit cards carry both eftpos and Visa or Mastercard logos, meaning the card can operate on either network. This allows the same card to use eftpos for local payments, and use Visa or Mastercard for overseas purchases or when used as a credit card.
Is eftpos a Mastercard or Visa?
eftpos is a standalone debit card scheme and network, separate from international card schemes like Mastercard and Visa. While Mastercard and Visa can be used globally, eftpos is only available in Australia. However, many Australian debit cards allow the same card to switch between the eftpos and Visa or Mastercard networks, depending on whether the payment is made locally or overseas.
