To EFTPOS or not to EFTPOS?
Have you ever been looking for a quick bite to eat and then realised you didn’t have enough cash? In most cases there is no need to panic as many merchants have EFTPOS or credit card facilities. With more and more consumers turning towards the convenience of plastic many small business owners will be pondering whether or not they should bite the bullet and install EFTPOS.
Cash is still the most popular method of payment especially for purchases under $60 but EFTPOS is looking to compete more aggressively in this area with plans to change its fee model to make transactions below $15 free of transaction fees and purchases over $15 a flat fee of just 5 cents. (However there is also talk of inter-transaction fees between banks increasing and this cost being passed on to retailers).EFTPOS is an extremely convenient method of payment and has lower transaction costs than credit cards. There were more than 2 billion EFTPOS transactions last year which accounted for over $120 billion in sales. If we consider that alongside a slowdown in the ATM cash distribution levels it is clear to see consumers love the convenience of plastic.
But clearly one of the biggest stumbling blocks for a small business wanting to install an EFTPOS machine is the cost. Apart from the transaction fee there are a number of other charges to consider. EFTPOS machines need to be rented from an EFTPOS network provider like a major bank. Typical rental on a terminal will be between $25-$35 per month. But you will also need to consider additional charges such as phone costs, delivery & installation costs and ongoing maintenance costs.
When considering the type of EFTPOS terminal there are a number of options available including terminals that only process cards from one bank, terminals that also process scheme debit cards or credit cards, mobile terminals, terminals that allow cash out etc. Each bank has a range of options so there is no reason why you cannot rent a terminal from a bank you do not bank with.
As more and more of customers expect businesses to offer EFTPOS services and as we continue to increase our reliance on plastic, the cost argument will become harder to justify especially if your competitors are already offering it! Is it time to review your payment options?
Richard Kemp – Watts Price Accountants
The advice provided on this Article is general advice only. It has been prepared without taking into account your objectives, financial situation or needs.