EFTPOS (Electronic Funds Transfer at Point of Sale) is a payment system that lets you pay for goods and services by transferring money directly from your bank account to a merchant’s account. When you tap, insert, or swipe your debit card at a terminal, the device communicates with your bank in real time to check your balance, authorize the payment, and move the funds. The entire process typically takes just a few seconds.
What Happens During a Transaction
An EFTPOS transaction follows a straightforward path. You present your card at the terminal by tapping it (contactless), inserting the chip, or swiping the magnetic stripe. For contactless payments under a certain threshold, no PIN is required. For larger amounts or chip-inserted transactions, you enter your PIN to verify your identity.
The terminal then sends an encrypted message through the payment network to your bank, asking two questions: is this card valid, and are there enough funds in the linked account? Your bank checks both and sends back an approval or decline. If approved, the terminal prints or displays a receipt, and the transaction amount is debited from your account. The merchant receives those funds in their business account, usually within one to two business days depending on their bank and payment provider.
Unlike a credit card transaction, EFTPOS pulls money you already have. There’s no line of credit involved, no interest charges, and no monthly bill. The money leaves your account almost immediately, which makes it functionally similar to paying with cash.
The EFTPOS Network vs. Visa and Mastercard Debit
Most Australian debit cards are “dual-network” cards, meaning they can process payments through two separate systems: the domestic eftpos network and an international network like Visa Debit or Mastercard Debit. Both draw from the same bank account, but they operate on different rails with different fee structures and capabilities.
The domestic eftpos network is designed primarily for in-store, card-present transactions within Australia. Visa Debit and Mastercard Debit, on the other hand, function more like credit cards in terms of where they’re accepted. They work for online purchases, phone orders, international payments, and anywhere Visa or Mastercard is accepted globally. If you’ve ever tried to use your debit card on an overseas website and it worked, that transaction went through the Visa or Mastercard network, not eftpos.
For merchants, the distinction matters because each network charges different fees. The eftpos network has historically been cheaper for in-store transactions, which is why many retailers prefer routing payments through it when possible.
How Least Cost Routing Affects Your Payment
Because your debit card sits on two networks, someone has to decide which one processes any given transaction. This is where least cost routing (LCR) comes in. LCR lets merchants automatically route your debit card payment through whichever network charges them the lowest fee, typically the domestic eftpos network for in-store purchases.
As of December 2025, 84 per cent of Australian merchants had LCR enabled for in-person transactions. The Reserve Bank of Australia has been pushing the payments industry to adopt LCR since 2017, and large payment providers are expected to offer and promote it to their merchants. For you as a customer, the experience is identical regardless of which network processes the payment. The money comes from the same account, and the transaction looks the same on your statement.
LCR for online and mobile wallet transactions is still being worked out. The RBA expects to consult on rules for those channels starting in mid-2026.
EFTPOS With Mobile Wallets
When you add your debit card to a mobile wallet like Apple Pay or Google Pay, both the eftpos and international networks are typically provisioned onto your device. When you tap your phone at a terminal, the merchant’s system chooses which network processes the transaction, not your phone. If the merchant has LCR enabled, the payment will likely route through eftpos. If not, it may default to Visa or Mastercard.
The RBA expects large debit card issuers (banks handling more than 1 per cent of total debit card transaction value) to provision both networks across all form factors they offer, including mobile wallets. This ensures that LCR remains an option whether you pay with a physical card or your phone.
What Merchants Pay
Merchants pay a fee on every card transaction, called a merchant service fee. This fee includes an interchange component (paid to the cardholder’s bank) plus charges from the payment network and the merchant’s payment provider. Eftpos interchange fees are generally lower than those on Visa or Mastercard debit, which is the main reason LCR saves merchants money.
The RBA is lowering maximum interchange fees for both debit and consumer credit card payments and introducing a cap on interchange fees for foreign cards. Starting in October 2026, eftpos, Mastercard, Visa, and large payment providers will be required to publish the fees they charge, making it easier for businesses to compare costs across providers. Standardized statement formats will also be introduced so merchants can get accurate quotes when shopping around.
On the surcharging front, Australian merchants have historically been allowed to pass card processing costs on to customers as a surcharge. That practice is set to end on 1 October 2026, when surcharging on debit and credit cards will be removed.
Where EFTPOS Works and Where It Doesn’t
The domestic eftpos network covers in-person transactions at Australian retailers, from supermarkets and petrol stations to small cafes. Most terminals also support cash out, letting you withdraw cash from your bank account at the register without visiting an ATM.
Where eftpos falls short is reach. It doesn’t work for online shopping, international purchases, or payments made over the phone. For those, your card automatically uses the Visa or Mastercard network. If you’re travelling overseas, your debit card transactions will go through the international network as well. The eftpos branding on your card is essentially dormant outside Australia’s in-store environment.
This dual setup means you don’t need to carry separate cards. One debit card handles domestic tap-and-go payments through eftpos and international or online payments through Visa or Mastercard, all drawing from the same account.