Many consumers in Australia prefer to use money they know they have. Credit definitely isn’t their first option. For these shoppers, debit from a savings account is the way to go, and in Australia, there’s a unique way of doing just that.
Eftpos (eftpos) is a privately-run, Australian debit card payment system. A long-standing staple of the country’s financial landscape, it has allowed electronic payments at the point of sale for four decades.
And while it might share the same name as the commonly used EFTPOS abbreviation (Electronic Funds Transfer at Point Of Sale), they are two very different things.
The rise and competition of eftpos
The eftpos payment system was launched in Australia during 1983. It introduced a quick, easy and secure way to pay in stores.
Quickly, it became the go-to choice of merchant payment systems in both Australia and New Zealand, accounting for 85% of debit card payments in 2008/09, as per RBA figures.
However, rising use of international schemes like Visa and Mastercard led to a decline among consumers in the use of eftpos cards. Debit Mastercard launched in Australia in late 2005, and scheme debit cards were actively promoted by major banks. In the year to September 2009 alone, scheme debit transactions grew 37%.
The RBA intervened specifically to help eftpos compete in 2009 by revising interchange rates of Visa and Mastercard transactions. In the years following, competition has been rife between them.
We know that eftpos started to decline at some point: 1.8 billion transactions totalling over $115 billion were processed via eftpos during the 2017/18 period, down from 2 billion transactions in 2016/17 (unfortunately, these are still the latest eftpos-only figures).
The eftpos logo.
But since forming the group Australian Payments Plus (AP+) in February 2022 with domestic payment companies BPAY Group and NPP Australia, eftpos has reclaimed market share from Visa and Mastercard.
This is thanks to a higher uptake of least-cost routing (eftpos calls it Merchant Choice Routing i.e. MCR) and eftpos’ entry into online payments.
And there’s a larger pie to take from now: debit cards account for over 75% of all card payments in Australia, according to AP+.
How does eftpos work in Australia?
The eftpos system is composed of seven proprietary networks which all interlink with each other. These networks are principally operated by the major Australian banks such as Westpac, Commonwealth Bank and National Australia Bank.
Almost all debit cards issued in Australia can process transactions via eftpos. These are known as dual-network cards because they support international schemes like Visa or Mastercard as well as the Australian eftpos system.
There are also about 5 million prepaid cards and over 5 million credit cards with eftpos functionality in circulation.
Australians have three payment options at the point of sale:
- Cheque (CHQ)
- Savings (SAV)
- Credit (CR)
‘Cheque’ and ‘Savings’ purchases are processed through eftpos. ‘Credit’ runs the transaction across the Visa or Mastercard network, depending on the card type.
The transaction amount is transferred to the retailer as soon as the payment clears.
Consumers will then instantly have funds deducted from their chosen account, making it a great way to keep track of money spent in real time.
Shoppers can also use eftpos to withdraw cash from any merchant accepting card payments. This makes life a lot easier if an ATM isn’t close by.
It’s also quite common for merchants to set a minimum purchase amount of $5 or $10 if shoppers want to withdraw cash. This is widely accepted by consumers in Australia as the trade-off for not having to look for an ATM — a win-win for both customer and retailer.
Which merchant service providers accept eftpos?
Small businesses wanting to accept eftpos transactions will usually need to sign a contract with an eftpos-approved merchant service provider such as:
- Australia and New Zealand Banking Group
- Commonwealth Bank of Australia
- Cuscal
- Fiserv/First Data Network Australia
- National Australia Bank
- Tyro
- Westpac Banking Corporation
- Windcave
Certain payment providers also offer eftpos acceptance as a part of their package. For example, pay-as-you-go solution Square accept eftpos cards without contractual lock-in. These payment providers have their own agreement in place with one of the main merchant service providers offering eftpos contracts directly.
What does eftpos cost to accept?
The average eftpos merchant rate is around 0.39% (March 2026), while Visa and Mastercard charge between 0.5% and 1% of the transaction total on average.
Credit cards can be accepted by entering into a separate agreement with the credit card company, with varying costs for the individual contracts. Alternatively, you can avoid signing a contract through a pay-as-you-go system like Zeller.
Terminal rental usually costs at least $25 a month.
What are the ‘Tap & Pay’ options with eftpos?
Contactless payments dominate in Australia. Historically, eftpos was behind Visa and Mastercard for lacking tap-and-go, but that was years ago now.
Eftpos uses its own Tap & Pay technology so users enjoy quick and simple transactions when spending under $200. Higher amounts require a PIN.
Its compatibility with mobile wallets allows eftpos cardholders to add the card to Apple Pay, Google Pay or Samsung Pay and pay via contactless that way.
Compatibility with your mobile wallet is available to cardholders from most major banks and financial institutions.
A more recent payment method that eftpos supports, Tap to Pay on iPhone or Android, is when customers tap their card or phone on the merchant’s phone to pay via contactless.
Eftpos can be used with Apple Pay.
Online payments slowly evolving
Eftpos has been lagging behind when it comes to shopping online, but it’s gaining ground.
In early 2022, eftpos finally became available for certain Card On File payments, such as subscriptions. This same year, least-cost routing extended from in-person to online payments.
From that point on, eftpos could start to process payments online whenever an Australian dual-network card is used and least-cost routing is enabled. With those cards, payments will just route through eftpos instead of Visa and Mastercard, subtly picking the cheapest network for the merchant.
Because eftpos-only cards don’t work online, online sellers can’t advertise it as a standalone accepted payment method. But they do in many cases accept it in Australia when a dual-network card is used online.
An additional new payment feature developed by AP+ for online guest-checkout transactions, eftpos Click to Pay, will soon allow merchants to pay with eftpos online in one click with very little effort.
Still dominant, after some catching up online
With a recent boost to profits, eftpos is still a popular debit system.
With some of its market share previously eaten into by competitors, the Australian payment system has stabilised and partially reversed its decline due to the cost-saving Merchant Choice Routing system.
Since AP+’s involvement, eftpos has steadily expanded its presence online and in contactless payment methods. With Visa and Mastercard debit still available from practically all card providers, let’s see if this is enough to stay popular.
