An Electronic Funds Transfer at Point of Sale (EFTPOS) terminal allows businesses to accept debit and credit card transactions. Determining the true cost of an EFTPOS machine is complex because the price extends far beyond the hardware itself. The total investment depends heavily on factors like transaction volume, the acquisition model chosen, and specific service provider agreements. Understanding the total cost requires a detailed look at the initial hardware acquisition, variable transaction fees, and recurring monthly service charges.
Understanding the EFTPOS Ecosystem
Accepting card payments involves paying for the physical device and the necessary service infrastructure. Businesses pay for the terminal hardware, which customers interact with, and the network service that securely processes and settles the transaction. The EFTPOS term is common in regions like Australia and New Zealand, but the cost components apply to all modern card payment systems globally. Different terminals have different cost structures based on complexity and portability. Countertop terminals are fixed devices connected via broadband, while mobile or wireless terminals use cellular data (3G/4G) for payments anywhere. Integrated systems link the terminal directly to existing Point of Sale (POS) software, often adding to setup and licensing fees. While hardware dictates the baseline expense, the service element drives the majority of long-term operational costs.
Initial Costs: Purchase Versus Rental
Acquiring the physical EFTPOS terminal requires deciding between buying the hardware outright or paying a recurring rental fee. This choice significantly influences a business’s immediate capital expenditure and future fixed operating expenses. Purchase and rental models offer distinct financial trade-offs.
Direct Purchase Pricing
Buying the EFTPOS machine involves a one-time, upfront payment for the hardware, typically ranging from $1,000 to $1,900 for a standard terminal. Purchasing outright reduces ongoing fixed costs, but the business assumes responsibility for maintenance and replacement. Simpler, mobile devices can cost as little as $59, but these often carry higher transaction fees due to their simplified processing model.
Monthly Rental Fees
A rental agreement allows a business to use the terminal for a fixed monthly fee, typically ranging from $35 to $50 per device. This model avoids a large initial capital outlay, making it accessible for smaller businesses. Rental agreements often bundle support, maintenance, software updates, and compliance into the monthly subscription, transferring hardware upkeep to the provider. While some mobile devices rent for less ($25 to $40 per month), the overall long-term cost of renting usually exceeds the purchase price.
Lease-to-Own Options
Some providers offer hybrid models that structure the initial hardware cost into a series of payments over a fixed term. The business owns the device at the end of the contract. This lease-to-own approach spreads the purchase cost over time while securing the lower ongoing costs associated with ownership. These agreements combine manageable monthly payments with the long-term benefit of asset ownership.
Ongoing Costs: Transaction Fees
Transaction fees are the largest and most variable component of accepting card payments, directly impacting profitability based on volume. These fees are incurred every time a customer uses a card and are split among the issuing bank, the card network (Visa, Mastercard), and the payment processor. Average processing fees typically fall between 1.10% and 3.15% of the transaction value.
Three main models determine how these charges are applied: flat-rate, tiered, and interchange-plus pricing. Flat-rate pricing offers simplicity by charging a single percentage and sometimes a fixed cent amount for all transactions (e.g., 2.6% plus $0.10), regardless of the card type. While transparent and easy to predict, this rate is often higher than the actual processing cost, meaning the merchant overpays for convenience.
Tiered pricing groups interchange rates into categories like “qualified,” “mid-qualified,” and “non-qualified,” each with a set fee. The lowest rates are for qualified transactions, such as a standard debit card swiped in person. Premium rewards cards or keyed-in transactions fall into the higher-cost non-qualified tier. This model lacks transparency because the processor determines the tier, often routing transactions to the more expensive mid- or non-qualified tiers.
Interchange-plus pricing is the most transparent structure, passing the actual interchange fee and card brand fee directly to the merchant, plus a small fixed margin added by the processor. A typical structure might be interchange + 0.40% + $0.08. This ensures the merchant benefits when the underlying interchange rate is low. Although monthly statements are more complex, this model often results in the lowest overall processing costs for businesses with moderate to high transaction volumes.
Monthly Service and Ancillary Fees
Businesses face fixed, recurring charges that significantly contribute to the total operational expense, covering necessary infrastructure and security.
Payment Network and Gateway Fees
Payment network connection fees are charged monthly to link the terminal to the secure processing network, typically costing $15.00 to $18.90 per terminal. Gateway access fees are charged by the processor for securely routing and authorizing transactions between the terminal and the bank.
Compliance and Data Fees
Merchants must comply with the Payment Card Industry Data Security Standard (PCI DSS). Providers typically charge a recurring PCI compliance fee for support, ranging from $4.95 to over $20 per month. Failure to maintain validated compliance can result in substantial monthly non-compliance penalties, sometimes exceeding $100 until the issue is resolved. Mobile terminals require a dedicated SIM card for wireless connectivity, incurring a network or data fee, sometimes around $13 per month.
Minimum Processing Fees
Some agreements include a monthly minimum processing fee. This is a fixed charge applied if the business’s transaction volume does not generate a predetermined amount of revenue for the processor. These fixed fees must be factored into the budget regardless of sales volume.
Factors Influencing the Final Price
The final price depends on several business-specific factors that influence a provider’s risk assessment and negotiation leverage.
Transaction Volume and Ticket Size
The greatest factor is the business’s transaction volume and average ticket size. Providers offer significantly lower percentage rates to high-volume merchants because of the guaranteed revenue stream. A business processing millions annually has much greater power to negotiate a low interchange-plus markup than a small startup.
Industry Risk and Contract Length
Industry type also plays a role. Businesses in high-risk sectors, such as travel, or those with high average transaction values may face elevated fees to offset the provider’s increased risk of chargebacks and fraud. Contract length is another negotiating point, where committing to a multi-year agreement often secures a better rate structure and lower hardware cost than a month-to-month arrangement. However, longer contracts typically include steep early termination penalties.
Integration Requirements
Integration requirements can also alter the cost. Linking the EFTPOS terminal to an existing inventory management or Point of Sale (POS) system may require specific software licenses or customization fees. Choosing a proprietary integrated solution often locks the business into a single provider, limiting flexibility but streamlining operations.
Choosing the Right EFTPOS Solution
Selecting the optimal EFTPOS solution requires evaluating the total cost of ownership (TCO), not just the lowest advertised rate.
Business owners should first estimate their monthly transaction volume and average sale amount to accurately project variable costs. This projection allows for a clear comparison between the simplicity of flat-rate pricing and the lower long-term cost potential of an interchange-plus model.
The next step involves combining projected variable transaction costs with all fixed monthly charges, including hardware rental, gateway fees, and PCI compliance fees. This calculation provides a realistic estimate of the actual monthly expenditure.
Transparency in the contract is also important. Providers who openly itemize all fees, especially in an interchange-plus structure, allow for better cost management and easier negotiation.
Finally, the quality of customer support and network reliability should be weighed against minor cost savings. A failing terminal or poor technical support can lead to lost sales and operational disruption, costing more than a slightly higher monthly fee.