Zero Cost EFTPOS: How Does It Work and What’s the Catch?

Discover how to pass on your cost of acceptance with Zeller. In Australia, businesses are legally entitled to charge customers a fee for processing an electronic transaction. This fee is called a surcharge. The purpose of this fee is to cover the costs associated with accepting the customer’s chosen payment method — yet some merchants choose to absorb this cost themselves. Zeller Terminal makes it simple to pass on your entire transaction fee, or a percentage of your transaction fee, with the toggle of a switch. When you surcharge the transaction fee in full, your business is getting zero cost EFTPOS . Keep reading to discover more about credit card surcharges, the legalities around passing on your cost of acceptance, and how to set your EFTPOS surcharge on Zeller Terminal. What is a surcharge? Different payment methods have varying costs and benefits to both businesses and their customers. A surcharge is an extra charge you can pass onto your customers who choose to pay with a credit or debit card, or smart device. Every time your business processes a cashless transaction with an EFTPOS terminal , you are charged a small fee to cover the checks and balances that must occur in order to safely move funds from a customer’s bank account into your own. Zeller makes it easy for you to pass that cost — either in its entirety or in part — onto your customers as a surcharge. Having the ability to set a custom surcharge means you can choose what suits your business, and your customers. Why businesses surcharge their customers The prices that merchants set for their goods and services incorporate the general costs of running the business — such as rent and electricity, among other things. Yet an important distinction between other business costs and the costs associated with transactions is that it is the customer that chooses the method of payment, which then determines the cost of the transaction. Cards are the most frequently used method of payment in Australia. As cash use continues to decline, the more electronic transactions your business processes. You will need to make fewer trips to the bank to deposit your takings, spend less time counting cash drawers, and benefit from the increased security that solutions such as Zeller Terminal offers. For more information about the shift away from cash and how this impacts your business, read our blog: Why Accepting Credit Cards is Critical for Business . It typically costs just a few cents to process an electronic transaction. However, many merchants look for ways to grow their business. For some businesses, passing on transaction fees via surcharging is a way to achieve this. The downside of surcharging Surcharging is relatively common in Australia — you’ve undoubtedly paid a surcharge as a consumer, whether at your local coffee shop, hairdresser, or high street store. Businesses of all shapes and sizes choose to pass on their cost of acceptance this way. Yet, for some customers, surcharging can be a turn-off that impacts their likelihood to return to your business and purchase again. It may even impact their perception of your business. Research from Finder shows the majority of Australians don’t believe they should be charged for choosing to pay with a card or smart device. Now that cash payments are becoming less and less common, the practice of charging an additional fee for card payments has even been called “ redundant ”. Should your business surcharge customers? In determining whether or not to utilise the Zeller surcharging functionality to recoup your cost of acceptance from customers, consider: the customer perception of surcharging. how common (or uncommon) surcharging is in your specific industry. whether your nearby competitors impose a surcharge. Surcharging is more commonly accepted in some industries than others. For example, 23% of Zeller merchants who run retail stores surcharge their customers, compared to just 2% of those who operate a beauty salon — which indicates that consumers are likely accustomed to paying a surcharge when tapping their card to pay for a new shirt, but less accustomed to paying a surcharge for a manicure. On the other hand, 12.7% of Zeller merchants who run a bar, restaurant, cafe, or other hospitality business surcharge customers. It’s also important to pay attention to what your competitors are doing — especially if you run a business that is reliant on a steady stream of local customers, such as a coffee shop. If locals know they can purchase their daily cup of coffee from a competitor across the street without paying a surcharge, you may risk losing their business. Ultimately, the decision of whether or not to surcharge is yours alone; no one knows your customers better than you. If you decide not to toggle on surcharging, either in full or in part, you could look for other ways to reduce your business expenses — such as by increasing the price of your products or services. Zeller Terminal makes it as simple as possible for those who wish to surcharge their customers to recoup their cost of acceptance, either in full or in part. Keep reading to discover how much you can surcharge, and how to set up your Zeller Terminal for surcharging. Surcharging rules in Australia The Competition and Consumer Amendment (Payment Surcharges) Act 2016 prohibits businesses from charging customers an “excessive” surcharge. However, there is no set rule regarding what is deemed an excessive charge. Legally, businesses are entitled to recoup the cost of accepting a customer’s method of payment — no more. The Reserve Bank of Australia outlines the costs that can be covered in a surcharge, including: Merchant service fees Terminal rental fees Costs to maintain a credit card terminal Other fees including switching fees, fraud-related chargeback fees, and more. How much can Zeller merchants surcharge? In setting your surcharge, it’s important to remember that Zeller Terminal is yours to own outright. That means businesses that use Zeller do not incur terminal rental fees. Transactions processed through Zeller Terminal, where the customer and their card are both present, typically cost 1.4% of the total transaction amount. Card-not-present transactions (whether over the phone or via post) typically cost 1.7%, to reflect the increased security measures required to verify the transaction. The maximum surcharge you can set is equal to your transaction fee. How to set your surcharge with Zeller Setting your custom surcharge takes just a few moments, and can be done via Zeller Dashboard or Zeller Terminal. Simply follow the steps below, and every transaction processed through Zeller Terminal will have a surcharge applied automatically. Setting your surcharge on Zeller Dashboard Surcharging functionality can be accessed via the Payments settings for each individual Zeller Terminal. Follow the below steps to set your surcharge on Zeller Dashboard for in-person payments. Expand the Payments menu and then click Sites . Select the Site you would like to manage. Click the Payments tab at the top of the screen. From here, you can either: Toggle on Surcharge my total fees , or Surcharge a percentage and enter a custom card surcharge that is no more than 1.4%, or Click Save to confirm your changes. Electing to pass on your total fees means you will recoup your costs for the full transaction amount, including any tips, every time. As MOTO transactions incur a higher fee, you need to toggle on surcharging for card-not-present payments separately. The maximum surcharge you can set for MOTO transactions is 1.7%. Setting your surcharge on Zeller Terminal Setting and updating your surcharge on Zeller Terminal is just as simple — however, you must be logged in as an Account Administrator. This is to protect your business from staff accidentally toggling surcharging on or off. For more information about surcharging with Zeller Terminal, visit the Support Centre . Providing Zeller merchants with the ability to pass on transaction fees in full or in part is just one way Zeller supports merchants to run their business the way that suits them.

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.

Discover some simple ways to reduce your credit card processing fees. Merchant services fees are unavoidable. These days, more and more customers prefer to pay with a card or digital wallet. It’s simply more convenient than coins and notes. However, there are a few ways you can reduce the fees you pay to accept cashless transactions, and keep more money in your business. Keep reading to discover more about these costs, as well as seven ways to save money on merchant fees so you can focus on improving your margins, reinvesting in your business, and scaling your operations. What are merchant services? Merchant services are financial services and products for businesses. The term typically refers to EFTPOS machines and the technology required to process digital transactions. When a customer taps their card or digital wallet to your EFTPOS terminal, a number of things have to happen for the funds to move securely from their account into your business’.  Multiple security checks happen in milliseconds to ensure the customer has the required amount of funds available in their account for spending, and cardholder data must be encrypted. That process incurs a fee, called a processing fee. Your cost of acceptance (the amount of money it costs your business to accept cashless payments) accounts for a very small proportion of business costs. However, some merchant services providers also charge monthly fees, authorisation costs, terminal rental fees, and more. These costs add up, and eat into your profits. How to reduce the cost to your business The only way to avoid merchant fees altogether is to refuse cashless payments, and operate as a cash-only business. This is a drastic measure that will cost you customers in the long run. Your customers no longer carry cash, and sending them to the nearest ATM is likely to result in a lost sale. However, there are some ways to reduce merchant fees without sacrificing revenue or losing customers. 1. Understand your fees If you don’t know what you’re paying, you can’t possibly know if you’re paying too much — or identify opportunities to cut your costs and save money. Worse still, merchants who don’t understand their fees could be paying expensive fees unknowingly. Some common costs you could be paying include: establishment fees. Some providers will charge you just to get set up with an EFTPOS terminal. Each individual terminal may incur an additional fee. installation fees . Older terminal models may require a merchant services representative to visit your business for manual installation. monthly account keeping fees.  You could be up for administrative charges every month, just to use your account. terminal rental charges. If you do not purchase your terminal outright, you will be paying a rental fee for each EFTPOS terminal. minimum service fees. Your provider may impose a minimum monthly transaction amount which you must meet, or pay a fee. statement fees. You may be charged for the printing and mailing of your monthly merchant services statements. cash out fee. You may be charged a flat fee or percentage of the transaction to process a customer’s cash-out request. The first thing you need to do is carefully read your merchant statement and identify your true costs. You can’t cut costs if you don’t know what they are. Zeller fees are simple and straightforward: pay just 1.4% per tapped, dipped or swiped transaction. There are no hidden fees or charges. Purchase Zeller Terminal outright, and get set up in minutes. Zeller has been designed for busy, growing businesses, with a simple, easy-to-use design so that you can begin selling as soon as possible. Put dollars back on your bottom line and take the hassle out of trying to find out what exactly you’re paying for, and why. 2. Switch to zero cost EFTPOS Another way to cut business costs is to pass the cost of processing an electronic transaction on to the customer via a surcharge. That way, the customer pays for the cost of the transaction — and your business gets a fee-free EFTPOS solution . Surcharging is common practice in Australia, and customers are used to paying an additional couple of cents for the convenience of using their card. With Zeller, you can toggle surcharging on or off as you please. You have the option to surcharge customers the full cost of the transaction, or a percentage — it’s up to you. 3. Avoid long-term contracts Long contracts lock you into a merchant services facility for months or even years. If your merchant services provider doesn’t do a good job at supporting your business, or chooses not to develop their systems in line with the latest technology, you are still legally obligated to continue paying for the service. Plus, costs for ending a contract early can be steep. What seems like a good deal at the time can quickly become an anchor, tying you into a merchant services facility that costs your business dearly in the long run. Flexible contracts, or no contracts at all, are the way to go. Not only does this give you a competitive edge — by making it possible for you to change providers when it suits your business — but it ensures your provider has to work hard to keep you as a merchant customer. And you’ll never be up for early cancellation fees. When you sign up for Zeller, there are no lock-in contracts or commitments. We know you’ll love our solution enough to never want to leave. 4. Stay PCI compliant PCI stands for Payment Card Industry. As a merchant, there are security standards you must abide by to protect both your customers and your business. In a nutshell, these standards require you to store your customer’s data securely. There are a number of things you must do, such as: encrypt the transmission of cardholder data across open, public networks. track and monitor access to cardholder data. maintain a firewall configuration to protect cardholder data. The fees and fines for not complying with PCI standards are costly — not to mention the cost to your business, and customers, that flow from a security breach. When you accept payments via Zeller Terminal, Zeller takes care of your PCI compliance. It’s just another way our team of security experts helps keep your business safe. 5. Set a minimum card spend Some merchants choose to impose a minimum card spend, forcing customers that make a purchase under a set amount to pay with cash. Customers who aren’t carrying physical money (i.e. the vast majority) have two options: add additional, unwanted items to their purchase so that the minimum card spend is met. abandon the purchase. This is an obviously frustrating experience for customers, and one that could cost your business a customer for life. For this reason, while it is one way to minimise your transaction costs, it is not recommended. 6. Minimise chargebacks Sometimes, a customer may dispute a payment and seek to have the funds returned to their account. This is called a chargeback . When this occurs, the customer’s bank will contact your business for proof that the product or service in question was provided. If adequate proof cannot be provided, the bank will reverse the charge. On top of that, your business may have to pay a chargeback processing fee. Chargebacks are expensive. Thankfully, there are ways you can minimise the likelihood of them occurring, such as documenting evidence of each transaction you process. This documentation can include clear, itemised receipts, signed proof of delivery, a photo of your products in their postal packaging, and more. You can also minimise the risk of chargebacks by partnering with a secure payment processor with in-built fraud and chargeback prevention measures, like Zeller. 7. Find the best merchant services provider for your business Choosing a merchant services facility is one of the most important business decisions you can make. The provider you choose will impact how quickly you receive your funds, your profit margin, the transparency of your incomings and outgoings, and more. Consequently, the impact of choosing incorrectly will be felt across multiple points of your business. EFTPOS terminals used to be basic machines that merely facilitated the movement of money from a customers’ account to your own. Since then, technology has advanced. Your chosen payments partner should enable your business to grow by: enabling you to accept every payment from every customer processing cashless transactions in seconds giving you fast access to your funds allowing you to track transactions in real-time empowering you with transaction data you can use to make important business decisions If your merchant services provider isn’t doing those things for your business, it’s time to shop around for a better option. Zeller is built to give merchants better insight into the financial side of their business. It’s more than just a payments system. With Zeller as your payments partner, you get access to Zeller Transaction Account, Zeller Mastercard and Zeller Dashboard, so you can process sales, spend your takings and track your incomings and outgoings with ease. To learn more about how Zeller can help your business grow, contact Zeller Sales today.