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What does EFTPOS stand for and how does it work?

A retailer using EFTPOS to accept credit and debit cards and other contactless payments

5-minute read

If you’re researching how to take card payments in your business, one of the first terms you’ll come across is EFTPOS. Here, we’ll introduce you to electronic funds transfer and explain the different types of EFTPOS.


Key take-outs
  • The Australian debit card payment system is called eftpos
  • EFTPOS terminals facilitate the movement of money from buyer to seller
  • EFTPOS payment acceptance is now available as an app on eligible smartphones
  • Choosing the right EFTPOS solution for your business will depend on factors such as cost, flexibility, portability and point of sale integration.

EFTPOS meaning – what does it stand for?

EFTPOS in capital letters stands for Electronic Funds Transfer at Point of Sale. It's the term used to describe an electronic terminal that allows payments to be taken from debit cards, credit cards, and digital wallet systems such as Apple Pay and Google Pay.

But when it’s in lower case letters, eftpos refers to the debit card payment system that takes funds directly from a customer’s bank account to pay for purchases. The eftpos system was introduced in 1984 when eftpos Payments Australia Ltd made secure card payments possible at the cash register for the first time.

How does EFTPOS work?

Taking a face-to-face card or digital wallet payment requires an EFTPOS machine, or another type of card reader that connects with a bank or other financial services provider.

Customers in shops and restaurants used to have to swipe or insert their cards into the terminal to make a payment. Nowadays, it’s more common to simply tap the terminal to make contactless payments.

Once that action is completed, the EFTPOS machine contacts the customer’s bank to check that the card is valid and that sufficient funds or credit are available. The bank then sends a signal back approving the amount, triggering the process of moving the money from the customer’s bank or card account to the seller’s account at the time of settlement. 

How fast will I receive EFTPOS payments?

When choosing the right EFTPOS system for your business, it’s a good idea to check how quickly you’ll receive your payments. 

With Westpac EFTPOS machines for example, daily takings will be transferred into your Westpac business account instantly after settlement – meaning you can start using your takings immediately1 . With other Australian banks and providers, the transfers may take a number of days.

What types of EFTPOS terminal are there?

You can take contactless payments using a standalone terminal, which you key the amount into. Or you can have a terminal that connects with a point of sale (POS) system. The advantage of what’s called a POS-integrated system is that the sales amount is calculated by the POS and transmitted to the terminal, avoiding calculation and keying-in errors.

Westpac EFTPOS Connect machines offers POS integration, while EFTPOS Now offers the best of both worlds. A flexible, standalone machine that can have POS integration added as an optional extra.

Can I take EFTPOS payments on my mobile?

The latest innovation in taking card payments is an app called EFTPOS Air that you can download onto your compatible smartphone. Your mobile is already a phone, camera, torch, watch and compass. Now, with EFTPOS Air it can be an EFTPOS terminal too.

Your customers can tap to pay for goods and services as they would with a traditional EFTPOS machine, and their payment is deposited into your Westpac Business One, Business One Plus or Community Solutions One account the very same day.

EFTPOS Air is incredibly flexible because it can go anywhere you trade. You can use it as your main payment system or as a backup for busy times. And it works anywhere you can get a signal, so it’s great for mobile businesses and side hustles. Plus, it includes optional POS features allowing you to build a menu of products and services, for faster transactions.

How much does EFTPOS cost?

Cost is another area to check when you’re shopping around for a card payments solution. If you want a traditional EFTPOS machine, compare monthly terminal fees. You’ll also want to compare the cost of EFTPOS transactions.

The percentage charged per transaction can vary by card type and vary by EFTPOS provider. 

To keep things simple and predictable, Westpac charges a single flat rate of 1.2% for eftpos, Mastercard®, Visa® and UnionPay transactions, plus a monthly terminal fee. And to recover transaction costs, users can easily set up card surcharging.

With EFTPOS Air, the cost is 1.4% per transaction; and as it’s your own phone you’re using, there’s no terminal fee. 

Can I take EFTPOS payments over the phone?

Traditionally, EFTPOS payments are taken at the point of sale, so they require both the card and the EFTPOS machine to be present. However, if you want to take orders and card payments over the phone – such as for a takeaway delivery service – you can used what’s called a virtual terminal.

A virtual terminal is a secure web page interface on your PC, mobile or tablet, that allows you to input card numbers provided by customers over the phone. Everything else then works like the EFTPOS system, with funds moving from your customer’s bank or credit card account to your account.

How do I choose an EFTPOS system?

When looking for an EFTPOS solution for your type of business, think about:


  • Where and how you want to take EFTPOS payments
  • What card types you want to accept
  • Terminal fees and transaction rates
  • The speed of settlement into your account
  • Whether or not you want point of sale integration
  • Scalability of your EFTPOS system. 

A good starting point could be a chat with a payments specialist, to help cut through the confusion of options. If you’d like, call Westpac on 1800 029 749 or request a callback.

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Things you should know

Westpac’s products are subject to terms, conditions, fees and charges; and certain criteria may apply. Before making a decision, read the disclosure documents for your selected product or service, including the Product Disclosure Statement and T&Cs; and consider if the product is right for you.

The information in this article is general in nature and does not take your objectives, financial situation or needs into account. Consider its appropriateness to these factors; and we recommend you seek independent professional advice about your specific circumstances before making any decisions.

1. Westpac instant settlement functionality is not available between 9:30 pm and 11:59 pm (Presto Smart terminals) and between 9:30 pm and 11:00 pm (EFTPOS Now, EFTPOS Now with Presto, EFTPOS Flex and EFTPOS Connect terminals) - Sydney time. You can only perform a settlement once a day, before 9:30 pm (Sydney time). A settlement done after 11:00 pm for EFTPOS Now, EFTPOS Now with Presto, EFTPOS Flex and EFTPOS Connect terminals and after 11:59 pm for Presto Smart terminals, will be processed as a settlement for the next day. Subject to system availability, settlement can take place 7 days a week. Settlement must be to an eligible Westpac transaction account. Instant Settlement functionality is not available on Corporate Online. Instant Settlement is only available for Mastercard®, Visa® and eftpos transactions (plus UnionPay if using EFTPOS Connect).

Google Pay™ is a trademark of Google LLC.

Apple Pay is a trademark of Apple Inc., registered in the U.S. and other countries.

Mastercard® is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.


Visa® is a registered trademark of Visa International Service Association.


UnionPay is a trademark of UnionPay International Co. Ltd.