Advantages and disadvantages of using EFTPOS

Electronic funds transfer at the point of sale (EFTPOS) is a payment system that lets your customers pay directly into your bank account using an EFTPOS machine using a plastic card, such as a bankcard, credit card or debit card.

Benefits EFTPOS payments

As well as disadvantages, EFTPOS payments have several advantages. Check out these examples:

• Lower labour costs than cash

  EFTPOS payments go directly into your account, so there are lower labour costs since people don’t have to handle money or record cash receipts.

• Low risk of theft

  Since EFTPOS payments go directly into your account, they have a lower risk of theft than cash.

• Fast transaction speed

  EFTPOS payments are fast to process.

• Proof of payment

  EFTPOS automatically creates a record of payment, which can help avoid disputes.

• Convenience

  Some customers may find EFTPOS convenient, as they don't need to carry large amount of cash.

Disadvantages EFTPOS payments

EFTPOS payments are not free and have some disadvantages over other payment methods. Consider these examples:

• Service fees

  Your financial institution often charges service fees if you want to offer EFTPOS payments.

• Transaction costs

  Your financial institution may charge you a fee per transaction.

• Lack of privacy

  EFTPOS payments automatically create a record of each transaction. Customers may prefer cash for private goods and service, such as medications.

• Reliance on electrical and mobile phone infrastructure

  EFTPOS transactions require electricity and sometimes need access to a mobile phone networks. Cash may be more reliable if these services are unreliable or unavailable.