Does the Cost of Acceptance Outweigh the Price of Rejection?

What was once the go-to option for making purchases is fast becoming a thing of the past. Cash is no longer king. The most recent Consumer Payments Survey , conducted by the Reserve Bank of Australia (RBA) every three years, paints a bleak picture for the future of physical currency — and poses a problem for cash-only businesses. In 2019, 32 per cent of all in-person payments were made using cash. However, those purchases accounted for just 19 per cent of all in-person purchases. Three years prior, in 2016, 43 per cent of in-person payments were made using cash, accounting for 30 per cent of purchases. It’s a steep rate of decline that’s hard to ignore. As cash use continues to fall, and electronic payment methods become the go-to option for consumers, it becomes obvious that it’s not just a good idea to accept credit card payments for your small business — it’s vital for long-term success. Luckily, it’s surprisingly easy to start accepting credit card payments in Australia. Keep reading to learn more about the shift away from cash, why this change of preference impacts your business, and how to keep your customers happy by providing credit card payments as an option. Why do some businesses still operate as cash-only? A surprising number of businesses remain cash-only, despite the obvious benefits of accepting credit card payments. Among these are often food trucks and other street vendors, nail salons and some restaurants and coffee shops. Reasons for cash-only The decision to remain cash-only could be for a number of reasons; it could be due to something as simple as preference towards cash and resistance against change, or lack of a stable internet connection, or tax avoidance, or something else entirely.  The most commonly cited reasons for not making the switch to accept more modern forms of payment are: no credit card processing fees no waiting for payments to clear more straightforward accounting However, none of these reasons make it a more affordable option for business. In fact, not accepting credit cards could be costing a business in more ways than one. Perceived benefits don't outweigh the costs Providing no other option but to pay with cash can be a frustrating experience for a customer. It might even cost you their business. Research undertaken by the Australian Tax Office shows Australians are twice as likely to consider a cash-only payment experience as negative, rather than positive. That means operating as cash-only can have an impact on business reputation. That’s just one reason why knowing how to accept credit card payments in Australia is essential. The ATO has also done the maths to figure out whether accepting cash payments makes sense, from a financial standpoint, and discovered that processing a cash payment actually costs businesses nine cents more than processing a tap-and-go payment — while also taking about twice as long. Operating a cash-only business can cost you customers. Cash: kept on hand but not put to use Paper currency and coins will continue to play a role in payments well into the future. There’s no reason to think you won’t have at least the occasional customer who wants to pay for a purchase, especially a small one, with hard currency instead of a card. However, it’s becoming less and less common. The RBA has tracked a consistently downward trend in coin and currency payments since at least 2007, and the demographical data strongly suggests this trend will continue. Although older generations are still hanging on to their cash, just four per cent of 18 to 29 year olds make payments using cash on a frequent basis. Over time, that means this move away from cash will only become more noticeable. While it’s true that there was an injection of $11 billion worth of physical currency into circulation throughout the coronavirus crisis in 2020, the RBA has reported that this cash was stockpiled — not spent — suggesting a lack of confidence in the economy. Australians are keeping more coins and cash on hand, but you won’t necessarily see it flow into your business. Instead, your customers are continuing to turn to payment options beyond currency. Options for accepting credit card payments for small businesses All this talk of broad economic trends and data has an incredibly relevant point: your customers want to pay with a credit card and, as a business owner, your goal is to bring in revenue. So, how can you start accepting credit card payments at your business? The short answer is you need the right tools in place to accept credit card payments at your business. An Electronic Funds Transfer at Point Of Sale (EFTPOS) machine and a business account are the foundation of your business’s ability to process credit cards. This combination allows you to accept payment by processing cards in person, and then access your funds. There are plenty of options available to your business. An EFTPOS machine linked to a merchant account provided by a Big 4 bank is the most traditional. However, the process of applying for a business account and then ordering and setting up a payment terminal is often slow and time-consuming. A bank’s standards may even box out some smaller companies and new businesses without credit history or operating history. This route also isn’t typically the cheapest way to accept credit card payments in Australia, and it can take a number of business days for funds to reach your merchant account. That means your merchant account can actually be a bottleneck to your cash flow. An online merchant gateway , like PayPal or Stripe, is one option for e-commerce ventures. However, accepting in-person payments using an online gateway is often clunky and requires a number of workarounds; you’re effectively entering your customer’s details as if you were them. This is likely to leave your customers less than thrilled about the experience — and you and your staff consistently spending extra time on an everyday task. SME-focused alternatives Pairing a modern EFTPOS payment terminal with a banking alternative to the Big 4, such as a neobank, is an option many business owners are now considering. Frustrated with the lack of support traditional banks provide to large enterprises, small and business sized business owners are looking beyond the incumbents and setting their sights on more forward-thinking providers. When you take payment via Zeller Terminal , funds are settled into your Zeller Transaction Account on the same day — giving you fast access to your funds. Spend the money you make using your Zeller Mastercard as soon as funds clear. It’s the quickest way to speed up your cash flow and grow your business.

Looking for ways to save money in your business? Here are five. The primary purpose of any EFTPOS machine is to enable customers to pay for products or services safely and securely. However, operating a business is expensive — and accepting cards and other cashless forms of currency comes at a cost. Zeller was established to help Australian businesses grow, so it makes sense that together, Zeller Terminal , Zeller Transaction Account , and Zeller Debit Card can save you money. Here are five of the ways Zeller helps keep more money in your business. 1. One low, flat fee. Transaction charges are an expense a business incurs each time an electronic payment is processed. Depending on your payment services provider, these fees can vary widely — making it difficult to anticipate what charges you'll be up for at the end of the month. Zeller processes every tapped, dipped and swiped transaction (including AMEX) for one low rate of 1.4%. Quinton Evens, owner of White Lily Couture , recently made the switch to Zeller. “It started with thinking, how we can use our cash smarter? We looked at other banks and terminal options, but they couldn’t beat our current rate," he says. "When we calculated how much we were paying versus how much we could save with Zeller, it was a no-brainer. Saving $10,000 a year on transaction fees is insane." 2. Automatic surcharging for zero-cost EFTPOS. Surcharging is a part of modern-day life, and an easy way to recoup your cost of acceptance from customers who choose to use cashless forms of payment. The number of customers who carry cash is dwindling, meaning most sales these days come at a small cost — which you can pass on to the customer as a surcharge. For every purchase made with a card or device that is tapped, dipped or swiped to Zeller Terminal, the transaction cost is just 1.4%. As a merchant, you are legally able to pass your cost of acceptance on to your customers – giving you fee-free EFTPOS . Some EFTPOS providers charge merchants an additional fee to switch surcharging functionality on, and make the switch irreversible. This effectively forces merchants to make a definitive decision for their business, one way or the other, and financially commit to it. But how do you know if surcharging is right for your business, and your customers? Zeller Terminal’s surcharging functionality can easily be toggled on from Zeller Dashboard. You can even customise your surcharge amount. With surcharging enabled, your Zeller Terminal will automatically apply a surcharge to every transaction total, after your customer's card is presented, but prior to any card verification and transaction authorisation steps (such as PIN entry or signature). If you decide surcharging is not for you, simply toggle the functionality off. Considering implementing a surcharge at your business? Read our article first to determine if it’s right for your business and your customers, or if there’s another way you can recoup the cost of transactions. 2. Fast settlement. For many merchants, the reality is that funds accepted via their EFTPOS machine aren’t cleared for one or two business days. That means that any payments accepted at the end of the week are often not available to be spent until Tuesday or Wednesday, the following week. The faster you can access your funds, the faster you can put them to work — paying staff, ordering supplies, and investing in your business. That’s why, when you accept funds via Zeller Terminal and have them settled in to your free Zeller Transaction Account, you are able to use your Zeller Debit Card to spend the funds the very next day. 3. Easy tipping. Tipping may not be an ingrained part of Australian culture, but by not offering it you’re removing the opportunity for customers to reward your staff for their efforts. You could be costing your business — especially if you have a large tourist clientele. Some EFTPOS terminals will prompt customers to leave a percentage-based tip, or to key in a specific amount. With Zeller, you have the option to do both, one or the other, or neither. Why not enable Zeller’s tipping functionality, and leave it to the customer to decide whether they want to tip or not? Zeller Terminal enables you to prompt your customers to leave a dip during the transaction flow. This is particularly handy for hospitality-based businesses, however, these days many Australians are also tipping for services rendered. So, how much should you prompt customers to tip? Some sources say 10% is typical. Others say $5 per person, or more if dining at a high-end restaurant. With tipping enabled, Zeller Terminal can prompt your customer to either enter a numerical figure or select a percentage-based tip. You can even customise the percentage-based tip amounts – say, 5%, 10% and 20%. 4. Transaction visibility. In order to appropriately manage your cash flow and identify any opportunities to save costs, you need visibility over your transactions. Any time you have the Zeller Terminal in hand, you can scroll through a chronological list of transactions. Instead of manually counting a cash draw or reconciling your paper receipts, simply tap Transactions from the Navigation menu and a list of transactions will appear. Knowing the state of your takings at any point in time is important. If you operate a food truck, for example, you might have a specific target to meet. With an hour to go until closing time, wouldn’t it be handy to know you only have $150 in transactions to go until you hit your goal for the day? Armed with that knowledge, you might decide to combine some of your items into a special — meaning less food wastage, and a strong end to the day. 5. Fee-free business debit card. Spend the funds settled into your Zeller Transaction Account using the Zeller Debit Card, and you won’t pay any fees for domestic purchases. There’s no annual card fee, either. You can use it both in person and online. We offer this to provide you more affordable business spending. Funds accepted through a Zeller Terminal will be swept into a Zeller Transaction Account overnight, and available for you to spend using your Zeller Debit Card the next business day. You are, however, able to settle funds to an external third-party bank account instead. By sharing your details with us, we may contact you from time to time. We promise we won’t bug you — and you can unsubscribe from communications at any time.

Understanding how much accepting card payments really costs your business. Let's be real: the vast majority of your customers are paying on card these days. Yet when it comes to EFTPOS transaction fees and associated costs charged by banks, there’s been little evolution. The Reserve Bank of Australia’s Consumer Payments Survey  suggests that as of 2022, cash payments represented just 16 percent of in-person transactions, continuing the downward trend that has been underway for nearly two decades. Despite the transformation of the payments landscape on the side of the customer, banks have made minimal effort to assist business owners in adapting to this evolving environment. The lack of flexibility on the part of the big four has made fertile ground for tech-forward payment solutions such as Zeller that are heralding a revolution in business banking — without the banks. Read on for a transparent breakdown of what fees are involved with traditional EFTPOS plans, and how Zeller Terminal could be a smarter alternative for when your business needs to accept card payments. What is an EFTPOS transaction fee? An EFTPOS transaction fee refers to the amount a business is required to pay whenever it processes a card payment with an EFTPOS terminal. With most traditional providers, the fee you pay will vary depending on what type of card a customer uses and will usually be charged as a percentage of the transaction value. Transaction fees, however, are just half of the picture. There can be plenty of other costs associated with EFTPOS, and it pays to understand these before you get started. Kirsten and Malcolm are just some of the thousands of business owners who have cottoned on to the fact that, by virtue of the increased volume of card users, the banks’ EFTPOS transaction fees and costs have become extortionate, despite there being no material improvement in the service provided. Whether you’re planning for your new business or are shopping for a better deal, it’s important to understand the terminology, and how the fees are calculated so you don’t get caught out later. The four factors to consider when calculating your EFTPOS costs 1. Establishment and Setup Establishment fee When you get started with EFTPOS, banks typically charge a one-off establishment fee that covers the setting up of your payment terminal. It is usually charged per facility, so if you have more than one EFTPOS machine , you will be charged for each. At Zeller, the only upfront cost you'll incur is the price of the Terminal, aside from that, it’s free to get started. What’s more, when you sign up, you’ll immediately receive a free Zeller Transaction Account which you can choose to settle your funds into and use to keep track of your business cash flow. You can also order a free Zeller Debit Card to manage your business expenses. Monthly service/plan fee Depending on the bank and the pricing plan you establish, you will also likely have to pay a monthly service/plan fee. This fee is charged to cover the costs of providing your payment service. At Zeller there is no monthly service fee. POS integration fee If you would like to integrate your EFTPOS terminal to your point-of-sale, the banks will typically charge you a one-time fee. At Zeller, integrating your POS and your terminal is easy and you can do it yourself – for free. Of course, if you have any issues, our support team is always here to help, at no cost. 2. EFTPOS Transaction Fees Minimum merchant service fee If your total sales fall below a certain amount, banks will typically charge you a monthly fee per EFTPOS machine. At Zeller, we pride ourselves on our transparent pricing. There are no minimum sales requirements, so even if you don’t start using your Zeller Terminal straight away, you won’t be charged until you make your first sale. Interchange & scheme fees When a customer uses a credit or debit card to make a purchase, a number of fees are charged between your bank, your customer's bank and the payment card network (eg. Visa, Mastercard, or American Express). Without getting into the weeds, (you can learn how EFTPOS transactions work here ), the important thing to understand is that the transaction fee you pay your bank, is entirely dependent on the type of card your customer uses, and it could be anywhere between 0.2% and 3.5%. While Zeller also incurs the same variable interchange and scheme fees as the banks do, we simply charge you one fixed amount, no matter what card a customer uses. Every payment that is tapped, dipped or swiped on a Zeller Terminal (including payments using an American Express card) costs just 1.4%. If the payment is made over the phone, the transaction costs 1.7%. Not only does this make reading your merchant statement much less of a headache, but more importantly, it allows you to more precisely forecast your EFTPOS transaction fees. This means more accurate budgeting, and ultimately, healthier cash flow for your business. What’s more, having a simple flat fee makes it much easier to calculate a surcharge for zero-cost EFTPOS (more on this below). Return or refund fees When you need to refund your customer, the banks may charge a flat fee per refund transaction processed where a credit or debit card has been used. The fee is typically based on the volume of refunds processed. Zeller does not charge a return or refund fee. Chargeback fees A chargeback is a transaction reversal initiated by a cardholder through their bank or credit card issuer. It allows the cardholder to dispute a transaction and request a refund of the funds. If this happens, the bank will charge you a processing fee for investigating and resolving the dispute. With Zeller, you will not be charged if a customer successfully disputes a chargeback. 3. EFTPOS Hardware Monthly terminal fee When you sign up to EFTPOS with a bank, they provide you with the machines under a rental agreement, you do not own them outright. You will therefore be charged a monthly fee to cover the rent of your EFTPOS terminal(s). The fee varies depending on the type and quantity of terminals you use. Zeller EFTPOS Terminal costs $259 and is available to buy outright. Aside from the accessories and stationary mentioned below, there are no additional costs associated with the hardware. Equipment not returned/damaged fee Given that bank-issued EFTPOS terminals remain the property of the bank, if these are not returned or become damaged due to negligence or misuse, you will be charged a fee. Paper rolls and accessories For any additional accessories you request, such as terminal stands, EFTPOS cables or paper rolls; a cost is incurred. Note that many bank-provided EFTPOS machines do not have digital receipt capability, so it’s important to take the cost of paper rolls into consideration. The beauty of Zeller Terminal, is that you can choose to SMS or email customers their receipts — removing the need for printer paper, and further reducing your costs. 4. Surcharging In Australia, it is legal to pass the cost of your EFTPOS transaction fees onto your customer. This process of surcharging is referred to as 'zero-cost EFTPOS'. While it's gaining widespread popularity among business owners, it's important you understand how it works, because charging more than what you pay in transaction fees can get your business into trouble. With a bank-provided EFTPOS machine, surcharging requires the merchant to calculate their own surcharge rate. Legally, the rate needs to be set at the average acceptance cost of the lowest card system . For instance, your surcharge fee might need to be set at 1% — even if the bank charges you 2.6% to accept American Express cards. It’s important to take this seriously as the Australian Competition and Consumer Commission (ACCC) may take action against any merchant whose card surcharge exceeds its ‘cost of acceptance’ (that is, the amount it costs you to accept a payment from a particular type of card). Having a complicated fee schedule makes it very difficult to work out the correct rate to surcharge at, especially if you are running a new business with no history of EFTPOS transactions to base your decision off. Thanks to Zeller’s flat rate applied to all cards, surcharging is simple. Business owners have the flexibility to toggle surcharging on or off — as and when it suits their business — and to choose to pass on the entire EFTPOS transaction fee, or just a fraction. With surcharging enabled, your Zeller Terminal will automatically apply a surcharge to every transaction total, no calculation required. Read our blog to find out whether surcharging is right for your business . The way people are paying has evolved, so it’s time your EFTPOS process did too. When figuring out what EFTPOS terminal is right for your business, it’s important not to simplify the decision down to transaction fees alone. The bank charges associated with setting up the service, connecting your POS, renting the terminal and paying for additional fees for refunds or receipt rolls can end up costing you much more than you think in the long run. Additionally, complex transaction fees that vary depending on each customer’s card makes surcharging a complicated, and stressful, experience. The way people are paying has evolved, so it’s time your EFTPOS process did too. Join the thousands of Australian businesses simplifying their transactions and saving money with Zeller.