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EFTPOS (Electronic Funds Transfer at Point of Sale) is a device by which sales transactions can be directly debited to the customer's bank account at the point of sale, through the use of a debit card (sometimes the same card used with Automatic Teller Machines). Merchants using EFTPOS can also offer cashout facilities to customers, where a customer can withdraw cash along with their purchase. EFTPOS are sometime also called POS Terminal or Payment Terminal and must not be confused with traditional Point of sale.

The customer's card is swiped through a card reader or inserted into chip reader and the merchant usually enters the amount of the transaction before the customer enters their account and PIN. There is usually a short delay while the EFTPOS terminal contacts the server (over a phone line or mobile connection) before a message of Accepted or Declined is returned. Often, at peak shopping times (for example the last shopping day before Christmas), the system can become overloaded and the delay will become extended or even time out.

Ubiquity in some countries

EFTPOS could be seen a major driver of a cashless society in these countries. EFTPOS is so wide-spread and so commonly used that it is necessary to advertise "cash only - no EFTPOS" for events or locations where it is not available. Mobile EFTPOS is now used by certain taxi companies, pizza delivery outlets and stall holders at festivals, allowing EFTPOS transactions to be carried over the mobile network.

EFTPOS in particular countries

In some countries, banks tend to levy a small fee of around 25 to 50 cents per debit card transaction. Although bank accounts without these fees are becoming more common, these charges mean it is wise to limit EFTPOS usage. There are, however, many people in New Zealand and Australia who routinely use EFTPOS for all transactions, no matter how small. This has resulted in some retailers refusing to accept EFTPOS as payment for small transactions, where paying the transaction fee would absorb the profit margin on the sale, making the transaction uneconomic for the retailer.

UK

In the UK integrated EFTPOS (usually referred to as debit cards) are an established part of the retail market. Cards commonly in circulation include Maestro (previously Switch), Solo, Visa Delta and Visa Electron. Banks do not charge customers for EFTPOS transactions in the UK, but some retailers make small charges, particularly where the transaction amount in question is small. The UK is in the process of converting all debit cards in circulation to Chip and PIN, based on the EMV standard, to increase transaction security.

New Zealand

The EFTPOS system is highly popular in New Zealand. Virtually all retail outlets have EFTPOS terminals, particularly supermarkets, dairies, service stations, and bars. Increasingly Taxi operators and even businesses operating from stands at events have mobile EFTPOS terminals.

New Zealanders use EFTPOS for both small and large transactions. It would not be unusual for a New Zealander to use an EFTPOS card to pay for an amount as small as $1 NZD. Because EFTPOS is such an integral part of spending in New Zealand, rare network failures cause tremendous delays, inconvenience and lost income to businesses who must resort to swipe machines to process EFTPOS transactions until the network returns to service.*

The Bank of New Zealand introduced EFTPOS to New Zealand in 1985 through a pilot scheme with petrol stations. New Zealand now has more EFTPOS terminals per head of population than any other country. In 2003, the Reserve Bank of New Zealand estimated that around 60% of all retail transactions utilized EFTPOS.*

EFTPOS is operated through two primary networks. One, EFTPOS NZ, owned by ANZ National Bank, and a second operated by Electronic Transaction Services Limited which is owned by ASB Bank, Westpac, ANZ National and the Bank of New Zealand. The ETSL network processes approximately 80% of all EFTPOS transactions in New Zealand on their Paymark EFTPOS network and has over 60,000 points of sale.*

Australia

EFTPOS is very popular in Australia and has been operating there since the 1980's. EFTPOS-enabled cards are accepted at almost all swipe terminals able to accept credit cards, regardless of the bank that issued the card, including Maestro cards issued by foreign banks, with most businesses accepting them, with 450,000 Point Of Sale terminals*. EFTPOS cards can also be used to deposit and withdraw cash over the counter at Australia Post outlets participating in giroPost, just as if the transaction was conducted at a bank branch, even if the bank branch is closed. Electronic transactions in Australia are generally processed via the Telstra Argent network - which has recently superseded the old Transcend network, in the last few years. Both were provided by Telstra, Australia's incumbent telco.

Australia operates both electronic credit card transaction authorization and traditional EFTPOS debit card authorization systems. The difference between the two being that EFTPOS transactions are authorized by Personal Identification Number (PIN) while credit card transactions are usually authorized by the printing and signing of a receipt.

Generally credit card transaction costs are born by the merchant with no fee applied to the end user while EFTPOS transactions cost the consumer an applicable withdrawal fee charged by their bank.

The introduction of Visa and Mastercard debit cards along with regulation in the settlement fees charged by the operators of both EFTPOS and credit cards by the Reserve Bank has seen a continuation in the increasing ubiquity of credit card use among Australians and a general decline in the profile of EFTPOS. However, the regulation of settlement fees also removed the ability of banks, who typically provide merchant services to retailers on behalf of Visa, Mastercard or Bankcard, from stopping those retailers charging extra fees to take payment by credit card instead of cash or EFTPOS. Though only a few operators with strong market power have done so, the passing on of fees charged for credit card transactions may result in an increased use of EFTPOS.

Canada

Main article: Interac
Canada has a nation-wide EFTPOS system, called Interac Direct Payment. Since being introduced in 1984, IDP has become the most popular payment method in the country, surpassing even regular cash payments in 2001.

Germany

Over recent years, in Germany EFTPOS has gained tremendously in acceptance. Facilities already existed before EFTPOS became popular with the Eurocheque card (Eurocheque was originally a system of paper cheques. In addition to the actual cheques, customers were issued a card, which needed to be shown along side the cheque as security measure. Those cards could and can also be used on ATM Terminals and at EFTPOS, which is nowadays their only function, since the Eurocheque system (along with the name, but they're still referred to as Eurocheque cards by most people) was abandoned in 2002 during the transition from Deutsche Mark to the Euro). In 2005, one must actively search for a store or petrol station without EFTPOS facilities. Processing fees are deducted from businesses, and because of this, some business owners refuse EFTPOS-sales for totals below a certain amount, usually 5 or 10 Euros.

Around 2000, an alternative method for EFTPOS payment was introduced, dubbed "Geldkarte" ("money card"). It uses a smart card chip on the front of a standard issue Eurocheque card (which still had the magnetic stripe on the back). This chip can be loaded with up to 200 Euros, and is advertised as means for medium to very small payments, down to the low euro or even cent range, as no processing fees are deducted by banks. It has not gained the popularity its inventors have hoped for, however this could change when this chip will be used as means of age verification at cigarette vending machines, which will become mandatory in 2007.

Chile

Chile has an EFTPOS system called Redcompra (Purchase Network) which is currently used in at least 23,000 establishments throughout the country. Goods may be purchased using this system at most supermarkets, retail stores, pubs and restaurants in major urban centers.

The Netherlands

In The Netherlands using EFTPOS is known as pinnen (pinning), a term derived from the use of a Personal Identification Number. PINs are also used for ATM transactions, and the term is used interchangeably by many people, although it was introduced as a marketing brand for EFTPOS. The system was launched in 1987, and currently has 166,375 terminals throughout the country, including mobile terminals used by delivery services and on markets. All banks offer a debit card suitable for EFTPOS with current accounts.

PIN transactions are usually free to the customer, but the retailer is charged per-transaction and monthly fees. Interpay, an association with all major banks as its members, runs the system, and until August 2005 also charged for it. Responding to allegations of monopoly abuse, it has handed over contractual responsibilities to its member banks, who now offer competing contracts. Interpay was fined EUR 47 million in 2004, but the fine was later dropped, and a related fine for banks was lowered from EUR 17 to EUR 14 million. Per-transaction fees are between 5-10 eurocents, depending on volume.

Credit cards use in The Netherlands is very low, and most credit cards cannot be used with EFTPOS, or charge very high fees to the customer. Furthermore, debit cards can be used in the entire EU for EFTPOS, and most debit cards are Cirrus cards.

See also

Some EFT/POS Manufacturers

Hardware

Software

Payment systems | Electronic commerce

POS-Terminal | Pos-терминал

 

This article is licensed under the GNU Free Documentation License. It uses material from the "EFTPOS".

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