What’s the difference between debit card and eftpos transactions? First off, let us be clear about what we mean by ‘eftpos’.

The string of letters ‘EFTPOS’ are an abbreviation of ‘Electronic Funds Transfer at Point Of Sale’. It refers to the debit and credit card transactions processed in an electronic payment terminal at a face-to-face checkout. Such a payment terminal is commonly called an EFTPOS machine.

What is an ‘eftpos’ card, then? Notice I spelled that with lower-case letters. That’s because it’s a trademarked brand of a national debit card system that only exists in Australia.

Although the name is based on the ‘Electronic Funds Transfers at Point Of Sale’ abbreviation, the Australian company has chosen to spell it with lower-case letters to distinguish itself from the globally recognised term ‘EFTPOS’.

Now the question: what is a debit card?

EFTPOS machine with bank card

An EFTPOS machine with a debit card.

A debit card is the international term for a payment card linked to a bank account. As opposed to a credit card that pulls money from an agreed credit limit rather than a bank account, transactions with a debit card immediately uses money that is in your current account.

Is a debit card the same as eftpos card payments? Not quite.

Debit vs. eftpos cards – differences and commonalities

The eftpos payment system functions like a debit card system, with the following things in common.

  • The card is linked to a current account at a bank

  • You can only spend money that is in the current account, though there may be an overdraft limit with interest charged

  • Transactions pull money immediately from the bank account

For these reasons, an eftpos card is indeed a debit card, but it is a domestic card only accepted in Australia by merchants equipped to accept the eftpos brand.

To contrast that with an international debit card, eftpos cards cannot be used outside of Australia, but debit cards issued by Visa, Mastercard, Discover and UnionPay networks can.

Network issuing debit cardsIssued where?Accepted where?
EFTPOSAustraliaAustralia only
Union PaySelect countries across the worldGlobally
DiscoverUnited StatesGlobally
EFTPOSAustraliaAustralia only
Union PaySelect countries across the worldGlobally
DiscoverUnited StatesGlobally

If you’re dealing with a lot of tourists, it is therefore paramount to accept other debit cards than the eftpos card only Australians use. The card acceptance agreements for eftpos and international card schemes are usually separate, but we know of one company – Square – that includes card acceptance for both without the need to sign any contract.

It is, on average, cheaper for a merchant to accept eftpos than it is to accept a debit card by Mastercard or Visa. In the December 2019 quarter, merchants paid only 0.3% of the transaction value of eftpos payments, while it cost the merchant 0.5% per transaction if a Visa or Mastercard debit card was used (average costs as outlined by Reserve Bank of Australia).

There are other differences between the debit card systems:

eftpos system

  • Composed of 7 interlinked networks/banks based in Australia

  • Can only be accepted in Australia

  • Can only be used in card terminals

  • No credit card option

  • With an eftpos card, the payer is only given the savings (SAV) and cheque (CHQ) options on a card terminal

  • Cardholders can take cash out at retail checkouts with an eftpos card

  • Merchants commonly need a separate eftpos contract to accept this card

International debit cards

  • Run by debit card networks operating internationally

  • Accepted internationally

  • Can be used in card terminals, online and via other sales channels

  • Visa, Mastercard etc. offer credit cards too

  • The cardholder may be given credit (CR) option as well as savings (SAV) and cheque (CHQ) on a card terminal

  • No cash-out option at retail checkouts

  • Card security standards arguably more cutting-edge than eftpos’

If you’re selling online, over the phone or remotely in another way, you have to accept Visa, Mastercard or other debit or credit cards since eftpos cannot be used online yet. Consequently, banks in Australia issue debit cards by Visa as well as eftpos.

Credit: Regional Australia Bank

Australian Visa Debit and eftpos cards

Australian banks issue both eftpos and Visa-branded debit cards.

Generally, the eftpos company has been slow to adopt international payment standards such as NFC technology that enables contactless payments. It was only in the last couple of years that eftpos introduced Tap & Pay (contactless) cards and eftpos Mobile Tap & Pay for Apple Pay and Google Pay, where Visa and Mastercard have had contactless cards for over a decade.